You have been warned not to use or to trust the Labor Department's Employment Situation report for September. This was supposed to come out on October 4, but the excuse of the federal government shutdown has the report coming out on the 22nd. We maintain that the Labor Department could have released this report because the closure was barely in effect when the report was due, and we have seen weekly jobless claims data since.
The stock market futures ticked up here on the report because it is weak enough that the implication is "Long Live QE!" It is silly for the market to be moving on what it should have anticipated, but that is another matter entirely.
As we would have assumed, the payrolls number is weaker than expected. That being said, the unemployment rate magically ticked down. Nonfarm payrolls grew by 148,000 in September and the unemployment rate somehow managed to come out at 7.2%.
Bloomberg's print version of the site showed that the consensus was 185,000 nonfarm payrolls created, but the Bloomberg TV estimate used this morning was 180,000. Private sector payrolls were shown to have only added some 126,000 jobs in September, while the Bloomberg printed private sector payroll creations estimate was 184,000.
Hiring petered out going into the government shutdown. One boost is that the August payrolls were revised up to 193,000 from the preliminary report of 169,000. July's report was revised downward to 89,000 from 104,000.
The Labor Department signaled that the data had been collected for the prior report on time, but the processing and calculation of data was delayed with the shutdown.
We would like to point out one thing here, and that is that it is absolutely silly that the market should be reacting to this economic report. It is just one more bit of proof that the markets no longer know how to price in any information at all and evidence that efficient market theory is dead. This report should have had absolutely no impact on the markets at all. Maybe the guys that run algorithms and black-box trading systems are as dumb as the rest of us after all.
Filed under: Economy