November Employment Data: 146K and 7.7% vs 80K and 7.9% Expected. Labor Force Participation Drops 0.2%. « Market Montage

As always, the over emphasis on +/-30-50K jobs in a 140M job economy is silly but this is the monthly ritual.  This part of the year is always rife with seasonal adjustments plus there is the Sandy effect, so I am sure there will be serious revisions (that everyone will ignore) in the coming months.

The headline number is a big beat at 146,000 vs 80,000 expected, and substantial drop in the unemployment rate to 7.7% versus expected 7.9%.  Of course that is largely being driven by yet ANOTHER drop in labor force participation rate of 0.2% to 63.6%.  (i.e. the labor force dropped by 350K this month, wiping out all gains of course)  Again given the type of participation rate seen around 2008/2009 we'd see an unemployment rate near 11%.  Just to remind everyone of a piece a few years agoDO NOT believe the standard story that the labor force participation rate is dropping due to "boomers retiring".  In fact the 65+ crowd increasingly cannot afford to retire and their participation rate has been INCREASING dramatically since the early 00s.  The 54-65 crowd rate is FLAT not dropping. Its the 18-24 year old group which has plummeted and there is also weakness in the 25-54 (i.e. bread and butter part of the labor force).  It is NOT boomers. 

September's number was cut from +148,000 to +132,000; October cut from +171,000 to +138,000.

Average workweek was flat, average earnings rose by 4 cents to $23.63.

Another funny thing is the report "over counted" government jobs by 38,000 (right ahead of the election) which they suddenly "figured it out" in this report.  hah.

Also of course much of this is driven by retail hiring for the holidays, about 35% of all the gains the past 3 months:

  • Retail trade employment rose by 53,000 in November and has increased by 140,000 over the past 3 months.
Full report here.

Futures are up and we should be testing the highs of last week, still have to get through these 1420s and mid 1430s on the S&P 500 as this inverse head and shoulders pattern continues to try to break out to the upside.

 

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