After a highly controversial drop in the unemployment rate to 7.8% from 8.1% in September, we now have the October unemployment rate announcement from the Labor Department. The official unemployment rate for October is 7.9%. Bloomberg was calling for a reading of 7.9% with a range of 7.8% to 8.0%; Dow Jones was calling for 7.9%.
The market was looking for this to be perhaps the most important Employment Situation report in a couple of years, as this is the final look at any government employment data before next week’s presidential election.
Perhaps the biggest number is the nonfarm payrolls, which figure grew by 171,000. Bloomberg had estimates of 125,000 based on a very wide range of 30,000 to 168,000. Dow Jones was calling for 125,000 as well. The change in private sector payrolls, a component of the total payrolls, came in at 184,000. Bloomberg was calling for 120,000.
We also saw revisions to that controversial data in September: nonfarm payrolls was revised to 148,000 from 114,000. August was revised to 192,000 from 142,000.
Average earnings in October slipped by 1 cent to $23.58, and the average workweek was unchanged at 34.4 hours.
There was one wild card that has to be addressed here. With the revisions being positive, it helps to at least explain that controversial report from a month ago. Dow futures were -6 and S&P futures were only +0.10 about two minutes before this report was released.
JON C. OGG
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