Today was J-DAY! Jobs Day. The report from the Labor Department indicated that in the month of July the unemployment rate ticked up to 8.3% from 8.2%. The big surprise came in the form of nonfarm payrolls, where the report showed a whopping 163,000 jobs in the month of July. The consensus from Bloomberg was 100,000 in nonfarm payrolls, 8.2% on unemployment and 110,000 on the private payrolls. Dow Jones was calling for about 95,000 jobs and 8.2% on the unemployment rate.
The unrevised data had previously shown that nonfarm payrolls gained by only 80,000 in June, following gains of 77,000 in May and 68,000 in April. The revisions were basically a wash with a change of only about 6,000 after looking at the data from the prior two months.
We would warn one thing here. The headline uptick is one thing, but the larger gain in jobs may take pressure off of Ben Bernanke and friends to come up with more creative easing and stimulative measures.
The big boost came from private payrolls in July, where some 172,000 gains were announced. Governments cut 9,000 jobs, with 2,000 of those being federal positions. Of the private sector report, 49,000 of those gains came from business and professional services. Manufacturing showed a gain of 25,000 in the month, while health care added 12,000 positions. A negative was a drop in 8,000 utility workers, tied to a labor dispute at Consolidated Edison Inc. (NYSE: ED). That dispute has now ended.
We also saw a rise in the broader measure of unemployment, which includes those in part-time jobs and those looking for jobs. That rate rose back up to 15.0% from 14.9%.
While this is a big upside gain in the payrolls, you can see that with the uptick in the unemployment rate that it is still not enough to lower that rate. The good news is that stock futures gained on the report, with S&P futures up 11 points and DJIA futures up 95 points.
JON C. OGG
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