November Jobs Data

by Jay Pestrichelli on December 7th, 2012

An unexpected gain of 146k new jobs beat Wall Street’s expectations of mid 70k and sent the futures from negative to positive in pre-market hours.  The unemployment rate also ticked town two tenths to 7.7%, but revisions to September and October’s numbers were lowered by 60k and 33k respectively totaling 99k.
This has been called the most irrelevant jobs report in the last 5 years. Why is that you ask? It’s because of the unique factors that were pushing and pulling on it. First of which is that from a time perspective, it is the farthest away from any political race. In other words, it will be unlikely that any one running for office in 2 or 4 years from now will ever reference this number. Second, the survey was conducted the week of Nov 5th vs. its normal mid-month timing. Third, is that hurricane Sandy hit NYC during this period and it's way too early to tell the true impact this has had.
Here’s the last 14 months of data.

A look at sector-by-sector showed nice progress in the Transports, Retail, Healthcare, and Administrative Services. All of these continued their trend of ticking upward as well as outperforming over the previous years.

The disappointment was again in the areas of construction and a flattening in manufacturing. However, if there are any two sectors that are going to have to ramp up production to offset Sandy, these are it, so this should reverse next month. 

Overall the jobs report, while better than expected, still isn’t enough to support a growing population and decline in the unemployment rate is just a result of people giving up the search for work. A Net of 47k after revisions is nothing to get bullish about.  Quite frankly we think the jobs market will be most impacted by the mandatory cuts imposed by the fiscal cliff.  December might be OK, but January and February are being set up as the months of big worry in this hedger’s opinion. 

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