Thursday, November 04, 2010

Employment Report Preview

by Calculated Risk on 11/04/2010 06:14:00 PM

The BLS will release the October Employment Report at 8:30 AM tomorrow. The consensus is for an increase of 60,000 payroll jobs in October, and for the unemployment rate to stay steady at 9.6%.

Most of the reports this week have been slightly above expectations:

  • The ADP employment report showed an increase of 43,000 private sector jobs in October. This was above expectations of 20,000 private sector jobs.

  • The ISM manufacturing employment index increased to 57.7 from 56.5 in September. This suggests some minor manufacturing job growth in October, although the ADP report showed a decline in manufacturing jobs.

  • The ISM non-manufacturing employment index increased to 50.9 from 50.2 in September. Although the relationship between this index and payroll jobs is noisy, this suggests close to 100,000 service jobs added in October.

  • Weekly initial unemployment claims were at about the same level in October as in September.

  • The decennial Census hiring and layoffs can finally be ignored this month. However it is worth remembering that the payroll reports showed job losses for each of the last four months, but excluding the decennial Census, the reports showed average gains of about 40,000 per month. So reports tomorrow that "this is the first gain since May" will be a little misleading.

    I don't expect a strong report, but perhaps slightly better than expectations (I have no strong view this month).