Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
There are a lot of moving parts in today’s data but for the most part the only numbers most care about are the headlines which came in at 243,000 jobs created and a drop in the unemployment rate of 0.2% to 8.3%. Politically this has to have Obama grinning, despite some of the underlying issues.
First, this is the best job growth number (ex census I presume) since early 2009. Private sector +257,000 with government -15,000. Looks like only 15,000 of the 40,000 “courier” jobs were lost (Fedex, UPS) which is a positive.
Revisions from the previous 2 months added 60,000.
Average hourly earnings increased 0.2%. A positive. Average workweek expanded 0.1 to 34.5, also a positive.
U-6 (broader unemployment, including those marginally attached and those working part time but wishing for full time work) still above 15% (15.1% v last month’s 15.2%).
Now the tricky part – the participation rate dropped yet again, this time to 63.7%. Which as you probably know by now helps support the unemployment rate. A more normalized participation rate is somewhere in the 66-67% range, and no this drop has nothing to do with baby boomers retiring. Indeed, workers in the older age groups are not only holding steady but in some cases increasing in participation. The pain is being felt in the youth, and main parts of the job market (age 25-54).
Some of us have been joking that if we can get the participation rate down into the 50%s, there will be no unemployed left in America. Maybe this is not going to be a joke after all!
[graph per ZeroHedge]
Now to add further confusion we had some census adjustments, and 508,000 people JOINED the labor force but 1.7M people joined the working age population.
The household employment survey (there are actually 2 reports released today) showed an increase of 847,000 jobs which is a huge number and supposedly catches small business and turns in the economy better.
As for the market, we are seeing yet another pop – at this point the NASDAQ is at the level of maximum overbought last seen during 2 periods of QE2, both of which led to smallish and quick corrections in the range of 3-5%. Today’s gap up should be interesting to watch. Also, this might push hopes for QE3 off the table (for now).
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