HOW WAS THE JOBS REPORT?

A smattering of analysts opinions courtesy of the WSJ:

• The bad news is that the jobs situation seems to have stalled out after improving dramatically through the summer. Private payroll declines actually widened slightly in September and in October. Thus, while we still strongly believe based on anecdotes, surveys, and other statistics that the labor situation is improving and that job losses will come to an end within a few months, the payroll numbers themselves do not indicate much positive momentum. In contrast to the payroll survey results, the household survey data were unambiguously negative. The unemployment rate surged to 10.2%, as the household gauge of employment plunged by almost 600,000 on top of September’s 785,000 drop. –Stephen Stanley, RBS
• While the politics will focus on the spike in the unemployment rate to 10.2%, the economics of the move make little sense and we think it is mostly a product of the small sample that the household survey is based on (note that labor force participation fell, which acted to hold down the rate!). The payroll change, with the significant net upward revisions to August and September, provide further confirmation that economic activity is expanding at a fairly solid pace once the brisk rate of productivity growth is factored in. –RDQ Economics
• October’s jump in the unemployment rate to 10.2% makes the national policy environment substantially more complex. The second-line numbers were even more discouraging: Accounting for marginally attached workers plus those employed part time for economic reasons, the jobless rate reached 17.5%. And the household survey showed employment dropping by 589,000, significantly higher than the 190,000 loss in the payroll survey. Coming out of a recession, the household survey should lead the payroll count. The latest data do not support arguments that the labor market will stabilize early in the 2010. –Joseph Brusuelas, Moody’s Economy.com
• The job loss was only slightly bigger than forecast but a sizeable (net 91,000) UPWARD revision to the two previous months may be a more important sign that job conditions are indeed improving. Historically, revisions to past data have moved in the direction of changes in overall trends so up revisions to the recent past suggest stronger conditions are developing. The details reinforced the impression that the job loss pace is slowing. –Nomura Global Economics
• The bottom line is that although labor market deterioration is clearly not occurring at the pace suffered late in 2008 and early this year, conditions remain brutal. Moreover, we continue to believe that the healing process will be a slow one, and that households will be contending with weak income growth and balance sheet issues for some time. –Joshua Shapiro, MFR Inc.
• One of the biggest positive contributions to employment came from temporary employment, which added 34,000 extra jobs. Temporary jobs aren’t the type of positions that you want to see being created in an economy further into a recovery. But at this early stage of the cycle, that rebound in temporary jobs suggests employers will be adding extra permanent positions over the next few months…Overall, this recovery is shaping up to be a “jobless” one, just like the last two. Our concern is that, unlike the last recovery, with credit still tight households aren’t going to be able to smooth their consumption using credit until the labour market eventually strengthens. –Paul Ashworth, Capital Economics
• Productivity gains and the hoarding of skilled labor earlier are some of the reasons for the jobless recovery. For fear of losing jobs, the current employees are working harder. During the recession, employers kept its most skilled workforce for better economic times. As production increases in some parts of the economy, the hoarded labor is utilized without adding to payrolls… Two of the hardest hit sectors of the economy, manufacturing and construction, should show some signs of stabilization in the future. –Sung Won Sohn, Smith School of Business and Economics
• The real surprise underlying the headline data was a reversal of manufacturing industry job losses, which worsened by 16k after a string of more stable results. That, in combination with retail softness, suggests limited optimism over the holiday retail season, particularly for larger ticket items. We continue to view the average workweek as a “leading indicator” of hiring. Particularly with future uncertainty as high as it is, firms are more likely to increase the hours of underemployed workers before hiring unemployed workers. With average weekly hours holding steady at 33.0, we see little evidence of retails even considering ramping up at this stage. –Guy LeBas, Janney Montgomery Scott
• Cyclical recovery is evident as job gains rise in temporary help and education/health and smaller job losses in retail and financial services. Turn in the labor market is very evident. Do expect job gains in 2010. –John Silvia, Wells Fargo