Economists React to Payroll Announcment


Friday’s report showing nonfarm payroll growth of 96,000 jobs in September was well shy of most economists’ expectations for more robust gains. Here’s what they’re saying about the data.
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“Looking at the sector details the report shows a very disappointing 18K drop in manufacturing, the first in three months and much worse than is implied by the ISM manufacturing employment index.”
— Ian Shepherdson, High Frequency Economics
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“Accelerating earnings indicate some tightening in the labor markets despite relatively sluggish payroll gains. As earnings continue to rise they will help sustain real consumer spending.”
— Steven A. Wood, Insight Economics
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“We see nothing here to discourage the Fed from raising rates a further 25 basis points on November 10. … Kerry can point to 585,000 payrolls lost during the Bush administration (after factoring in the benchmark revision). Bush can point to 1.69 million jobs created according to the household survey!”
— John Ryding, Bear Stearns
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“Job gains are not a convincing story for the a sustained expansion of the economy. Yet, employment gains are edging higher in a period of high uncertainty regarding oil prices and heavy storm weather for the southeastern portion of the country.”
— Stephen Gallagher, Societe Generale
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“The much ballyhooed announcement of the preliminary estimate of the benchmark revision to be released on February 4, 2005 was anticlimactic. The Labor Department estimates a 236K upward revision … This was at the lower end of most estimates, and is not a large revision by historical standards.”
— Joshua Shapiro, Maria Fiorini Ramirez
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“The biggest surprise in the report was that the BLS failed to provide their own estimate of the impact of the hurricanes on September payrolls.”
— David Greenlaw, Morgan Stanley

[BLR Note: Actually, this is incorrect: “BLS made additional data collection efforts for the hurricane-affected counties. Establishment survey response rates in September were within the normal range for these areas as well as for the U.S. as a whole . . . In the household survey, people who miss work for weather related events are counted as employed whether or not they are paid for the time off. ]
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“Once again, the conflicting evidence from the household and establishment surveys add to the confusion about overall labor market conditions. Indeed, the household survey itself contained apparently conflicting data. … There’s nothing here to alter either the political ‘spin’ about the job market or the course of monetary policy.”
— David Resler, Nomura Securities International
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Economists React
WSJ, October 8, 2004 12:56 p.m.,,SB109724343898240406,00.html

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