Highlights
The jobs picture in October worsened as the unemployment rate topped double digits and payroll jobs fell more than expected. Nonfarm payroll employment in October declined 190,000, following a revised decrease of 219,000 in September and a revised contraction of 154,000 in August. The October fall in payroll employment was more negative than the market projection for a 175,000 decrease. September and August revisions were up 91,000 net for the two months (the net declines were smaller).

Payroll losses were widespread in both goods-producing and service-providing sectors but declines were sharper in the goods-producing sector. Goods-producing jobs contracted 129,000 in October, following a 114,000 decline the month before. Construction jobs fell 62,000 while manufacturing decreased 61,000 and mining dipped 5,000.

Service-providing job losses, however, slowed to a 61,000 drop from a 105,000 fall in September. The largest decline in services was a 66,000 decrease in trade & transportation, including a 40,000 fall in retail. The one notable positive in the payroll survey portion of the employment situation was a 34,000 gain in temp help. This category is often seen as a leading indicator of hiring intentions by businesses. With incremental gains in August and September, this component has risen three months in a row.

On a year-ago basis, payroll jobs improved to down 4.0 percent in October from minus 4.2 the month before.

Wage inflation firmed as average hourly earnings in October rose 0.3 percent, following a 0.1 percent uptick the month before. The market had forecast a 0.1 percent advance. The average workweek was steady at 33.0 in October, falling short of the market forecast for 33.1 hours.

Turning to the household survey, the ranks of the unemployed continued to rise as the civilian unemployment rate worsened to 10.2percent from 9.8 percent in September. The consensus had expected a 9.9 percent rate. The October rate is the highest since the same rate for April 1983. The really bad news within the unemployment rate spike is that it was not due to a rise in the labor force (more choosing to look for jobs) but by a 558,000 surge in the number of unemployed. The labor force actually dipped 31,000 in October.

The bottom line is that the labor market is still in recession even though overall economic growth is positive. The jump in unemployment is going to keep consumers cautious and economic growth sluggish. On the release, bond yields eased and stock futures dipped.

Market Consensus Before Announcement
Nonfarm payroll employment in September fell 263,000, following a decline of 201,000 in August and a decrease of 304,000 in July. Job losses were widespread in both goods-producing and service-providing sectors. Wage inflation eased sharply as average hourly earnings in September grew 0.1 percent, following a 0.4 percent gain in August. Turning to the household survey, the civilian unemployment rate continued its uptrend, rising to 9.8 percent from 9.7 percent in August. Looking ahead, relatively unchanged initial unemployment claims in recent weeks suggest little progress in cutting payroll job losses for October and the unemployment rate is likely to drift higher.

2009 Release Schedule

Released On: 1/9 2/6 3/6 4/3 5/8 6/5 7/2 8/7 9/4 10/2 11/6 12/4 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov