Jobs report is a positive shocker, while sentiment dips
The Bureau of Labor Statistics has released its latest employment situation summary for the month of October, which contained surprisingly excellent news — employment rose by a larger-than-expected 204,000 jobs. This leaves the unemployment rate little changed at 7.3 percent.
After October’s federal government shutdown, such positive news was definitely unexpected and flies in the face of expectations from the economics-and-business set.
Pulling out a few nuggets from the report, the number of unemployed people remained stable, at 11.3 million, while the number who reported being on temporarily layoff increased by 448,000 — but this includes furloughed federal employees.
It’s also interesting to note the differences in the unemployment rate for the major worker groups: 7 percent for adult men, 6.4 percent for adult women, 22.2 percent for teenagers, 6.3 percent for whites, 13.1 percent for blacks and 9.1 percent for Hispanics.
The number of long-term unemployed workers (27+ weeks) stayed put at 4.1 million in October — accounting for 36.1 percent of the unemployed. The number of long-term unemployed has declined by 954,000 during 2013.
Putting a damper on the surprising good employment news, Reuters is out with news that U.S. consumer sentiment fell in November, which is more in line with conventional wisdom on the impact of the shutdown.
According to the latest Survey of Consumers from Thomson Reuters and the University of Michigan, the latest sentiment figure for November is 72.0, lower than October’s 73.2, also lower than what most economists expected and, regrettably as we enter the holiday season, lower than any other point since December 2011.
The report showed lower-income households concerned about their financial future, as opposed to those with incomes above $75,000 that were buoyed by the stock market’s recent gains.
It will be critical to see how employment data and holiday sales fare in the coming two months, as a sustained run of exceptional job figures could lead the Federal Reserve to taper its stimulating efforts sooner rather than later, which would be major news in the greater business world.