The Bureau of Labor Statistics reported on Friday that nonfarm payrolls rose by 161,000 in October. This was modestly below the consensus estimates, but the real issue was that the 19,000 government jobs means that the private sector added just 142,000 payrolls in October.

If you read through the ADP payrolls report earlier in the week, it pretty much set the bias for a lower private sector payrolls report. Other economic releases from ISM and various Fed branches have pointed out that hiring has become less robust of late. Maybe it is just the election, or maybe it is something worse.

What might handily stand out here is that the six-month average was little changed at 179,000 for nonfarm payrolls. That was down from almost 250,000 at the time of the rate hike last December.

Merrill Lynch’s economic team suggested that job growth was strong but with quirks from Hurricane Matthew. The report said:

October payrolls grew 161,000 with 44,000 in revisions. Wages increased 0.4% month over month (2.8% year over year) and the unemployment rate fell to 4.9%. Despite special factors related to Hurricane Matthew which boosted wage growth, we think the October jobs report was robust. This leaves the Fed comfortable hiking in December, but the data must continue to be solid and financial conditions stable.

Lindsey M. Piegza, chief economist at Stifel Fixed Income, believes that the 161,00 payroll gains is hardly a green light for a December rate hike. Her summary said:

Employment gains remain modest – not too hot, not too cold.  For the Fed, a gain of 161,000 is hardly a green light for a December rate hike, nor does it, however, pull the plug on a plan to further remove accommodation just five weeks from now with a second-round hike of 25 basis points. In other words, this morning’s report simply leaves Committee members – and market participants alike – questioning the true direction and health of the U.S. labor market. With 79 consecutive months of positive job creation, the hawks will argue the labor market is at or near full-employment; however, with the pace of hiring slowing dramatically since liftoff last year, coupled with minimal wage pressures, the doves will argue lingering weakness in fundamentals.  According to this week’s November FOMC statement, the Fed is looking for just “some” further improvement. This morning’s employment report, however, arguably fails to meet even this new, lowered threshold of progress. After all, more of the same is hardly positive headway.

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