For a bond or a stock trader, it all comes down to the headline nonfarm payroll number. For a labour market analyst, what is important is the information that comes from many parts of the Household survey. Who in their right mind could ever refer to the jobs report — it is an entire report, by the way — being strong when the employment-to-population ratio (the “employment rate”) dipped two-tenths of a percentage point to 58.3% in October. The labour force plunged 254k and the participation rate fell from 64.7% in September to 64.5% — the lowest level since November 1984! How is that bullish? If not for the slide in the labour force last month, the unemployment rate would have gone back up to 10%
The level of unemployment rose 76k in October and is up now in two of the past three months. They may take issue with Mr. Market’s and Mr. Media’s response to the headline payroll figure. The Household survey, when put on the comparable footing to the payroll report (the “population and payroll concept adjusted” series), showed a 505k slide in employment last month, the steepest decline of the year. That was certainly no +151k. Not only that, but the Household survey found that 124,000 full-time jobs were lost in October, making it a five-month streak during which 1.1 million of these positions vanished, only replaced in part by 690k part-time workers.
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