There was a huge surprise from the Labor Department this morning to the upside. The non-farm payrolls grew by a whopping 243,000 and that was far higher than almost all economists were projecting and it also contradicts the muted jobs data from other sources that came out all week ahead of today’s data.
The official unemployment rate was put at 8.3% versus a prior reading the month before of 8.5%. The private sector’s contribution was even better at 257,000 and the government sector was -14,000 jobs.
Bloomberg had the consensus targets from its economist surveys at 135,000 on the non-farm payrolls and a static 8.5% in the official unemployment rate. Dow Jones had only 125,000 expected in non-farm payrolls. This is the lowest official unemployment rate since February of 2009.
Another sweetener to the pot is that the payrolls in November and December were revised higher by 60,000 more jobs than what was reported.
The number of (the counted) unemployed is now at 12.8 million and that is roughly a 3-year low.
With 2012 being an election year, both side of the political aisle are going to be watching these figures as closely as investors. The FOMC may now have to already consider lowering its unemployment rate target for 2012, and that could make a change of opinion on ‘exceptionally low interest rates through the end of 2014’ according to trader logic.
JON C. OGG