Dissecting the NFP Dissappointment

Today’s NFP numbers were disappointing Our earlier comments (Excuse to Sell?) remain in effect.

Let’s take a closer look at the data:

• The seasonally adjusted data showed a small gain of +39,000 new jobs
• Unemployment ticked up 0.2 to 9.8%. This reflected a 276,000 drop in household employment and a 103,000 increase in the civilian labor force.
• Among all industries 52% were hiring, down from 58% in October
• Private sector job gains were 50,000 while government jobs fell 11,000. (Private service-providing gained 65,000; Goods-producing lost 15,000)
• Job gains were found in temporary help services (+40,000); Surprisingly employment fell in retail trade
• Average work week was unchanged at 34.3 hours in November
• Average hourly wages increased 1 cent.
• The revisions were positive: September improved from -41,000
to -24,000; October saw a big upward revision, from +151,000 to +172,000.

The negative data stands in stark contrast to recent data from ADP (+93,000), and modest Challenger layoff announcements (+48,711). The Monster employment index did slip two points to 134, however, despite showing strength in retail.

Bottom line: Even though we expect these numbers to eventually be revised upwards, there remains little proof of a turnaround in the Labor market yet. Like most post-credit crisis economies, this remains an anemic recovery. Any hopes of virtuous, self-sustaining recovery must be put on hold. The headwinds of high Unemployment and weak Housing remain problematic…

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