Payrolls & Unemployment Holding Up Far Better Than Market Expectations

The Department of Labor has released the jobs data for the month of July and the number was far better than expected (if the data is real).  If you have been watching the trading tape as bonds rose and stocks tanked, it was almost impossible to think that a very positive number was coming on the jobs front.  In fact, some market players have even gone as far as bracing for a return to the red as Washington’s shenanigans of the debt ceiling in recent weeks torpedoed the business climate.  This is a going to be a huge boost, but it is impossible to think that some will not accuse the data of being too rosy.

The non-Farm payrolls grew by 117,000 in July, while Bloomberg had estimates of 75,000 for non-Farm Payrolls creation versus a preliminary figure of 18,000 in June.  The private payrolls grew by 154,000 and that was expected to be a mere 108,000 after a June preliminary figure of 57,000.

What is also noted is that the May and June payrolls were revised higher to not reflect such a drop. The combined gains were 56,000, with 46,000 being added to June and another 10,000 being added to May.

The unemployment rate was expected to remain flat at 9.2% per Bloomberg targets, but the rate was tallied up at 9.1%.

There are two ways to consider the data today.  The month-ago data for June was so far under estimates that this number this revision gets it much closer to what had been previously expected.  The flip-side of the equation is that some may continue to accuse the Labor Department of having optimistic errors in the reporting as you have seen year in and year out regardless of which administration is discussed.

The market was down over 500 DJIA points on Thursday and now the indications are up triple-digit in DJIA and up double-digit for the S&P 500 futures.

This is good news for the market in general, but keep in mind that this is far under where the growth camp is calling for the numbers to be for a continued economic improvement.

JON C. OGG