Why Did This Jobs Report Stink? - Real Time Insight


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It was a First Friday today.  Global share markets were trading briskly in advance of the monthly Federal U.S. non-farm jobs report.

Europe's major stocks indexes and S&P futures were both up ahead of the report.  Asia was mixed.   The U.S. 10-year rate traded down at 2.97%, having pulled back from a 3.00% handle delivered by the front-running +238,000 private ADP job additions reported on Wednesday.

Even the forecasters were bullish.  Bloomberg forecasted non-form payrolls at +197,000 jobs in December, and a +203,000 jobs advance in November.  Such job gains would bring the annual U.S. increase to 2.27 million jobs, an amount last exceeded eight years ago in 2005.   Bloomberg forecasters also looked for a 7% U.S. household
unemployment rate.

What did we get? 

Total non-farm payrolls came in at +74,000.  That's the lowest rate since December 2011.  In 2013, job growth averaged +182,000.  Employment in retail trade in December was +55,000 of that.  That means we added a paltry +19,000 jobs away from the shopping malls. 

We got to a 6.7% unemployment rate via the worst labor force participation rate (62.8%) seen in decades.  The 2013 average was just below 63.3%.  That +0.5% difference spoke to rising frustration in the ranks of the millions of long-term unemployed workers. WIth 150 million workers, one half a percent becomes 750,000 people.  

There was one small bit of good news.  November's job number was revised up to +241,000.

Surprisingly, after the weak report, the futures in S&P 500 stocks stayed positive. Europe's stock indexes keep on going up.  The U.S. 10-year rate traded down 7 basis points to 2.90%.

My Real Time Insight Question:  Why Did This Jobs Report Stink?

ARTISAN PTNR AM (APAM): Free Stock Analysis Report

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