This Friday we will get to see the October nonfarm payroll number and unemployment rates from the Labor Department. Unfortunately, the tone is going from bad to worse. Last week a report from ADP showed that the private sector only created 130,000 jobs in October. TrimTabs has an even worse number for October.
If TrimTabs Investment Research is correct, there were only a paltry 91,000 jobs created in October. This is down from 159,000 in September and would mark the fourth month that TrimTabs has measured fewer than 100,000 jobs so far in 2013.
Where the report is interesting is that the partial federal government shutdown was said to have only had a modest negative impact on the labor market. It sure seemed worse than that when we were all going through it, but recent economic reports have shown that the drop was just not as bad as the media might have led you to believe during the shutdown and debt ceiling debate.
TrimTabs also said that wages and salaries increased 0.5% year-over-year in real terms in October. That is the second-lowest level this year and down from 2.0% year-over-year in September.
Note that TrimTabs makes its estimates based on daily income tax deposits to the U.S. Treasury from all salaried U.S. employees. TrimTabs always adds in, “They are historically more accurate than the initial estimates from the Bureau of Labor Statistics.”
If Wednesday’s research is correct, then the average monthly jobs gains in 2013 are down to 114,000 per month. The average was up at 151,000 jobs per month last year. The key quote said, “The unemployment rate has drifted lower this year mostly because more Americans have dropped out of the labor force, not because job growth has picked up.”
Friday’s unemployment report is now down to only 120,000 in nonfarm payroll creations and 128,000 private sector payrolls, according to the Bloomberg consensus. The official unemployment rate is expected to have risen to 7.3% in October from 7.2% in September.
As a reminder, bad might be the new good. Very slow growth with no wage and price pressure allows Ben Bernanke and Janet Yellen to keep up the Fed’s $85 billion in monthly bond buying until the end of days.
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