Non-Farm Payrolls Doesn't Make The Grade

The Labor Department has just released what is so far the most important jobs data in 2010.  The December unemployment rate came out at 10.0% and the change in non-Farm payrolls was -85,000.  Bloomberg had a consensus reading of 10.1% for December versus 10.% initially reported for November.  It also had a consensus of 10,000 jobs created according to the change in non-Farm payrolls in December versus a figure of -11,000 initially reported for November.

Average hourly earnings came in at a gain of 0.2% on flat hours of 33.2 hours. November was revised in non-Farm payrolls from -11,000 to +4,000; although October was revised lower.

The bias of the market had been braced for anything but a very large increase or decrease in the number of jobs.  A large decrease implies a safety net for the FOMC to perpetually keep that Fed Funds rate at near-zero.  The dollar is weaker on this news as this gives the FOMC more time to hold rates flat.

Nothing here shows any major hiring initiatives that came on board at year-end.  As a reminder, the unofficial unemployment rate of workers on short contracts, part-time, and underemployed is still well into double-digit figures.

JON C. OGG
JANUARY 8, 2010