July Payrolls fell by 247k, much better than expectations of a decline of 325k and a clear differential from ADP. Net revisions in the prior two months were higher by 43k. A major factor was a decline of 52k in manufacturing, 48k better than expected. The seasonal distortions from the auto companies may have had an impact. The unemployment rate was 9.4%, .2% less than expected and down from 9.5% in June as the household survey fell by 155k while the labor force fell by 422k. The U6 rate which is all inclusive, fell .2% to 16.3%. Average hourly earnings rose .2%, .1% better than forecasted. Average weekly hours rose to 33.1 from the record low of 33. The areas of job growth occurred in education/health as has been seen, leisure/hospitality and the government, particularly at the federal level. Temp jobs, a precursor to permanent employment, fell by 10k vs a drop of 31k in June. The birth/death model added 32k, 7k more than July ’08. Bottom line, the number is welcome relief and a clear improvement but with seasonal distortions in manufacturing.
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