Bureau of Labor Statistics

Bureau of Labor Statistics (Photo credit: Wikipedia)

Confusing is a better word than surprising, to describe the report from the Bureau of Labor just released on Friday. Contradictions abound.

Total nonfarm payroll employment rose by 114,000, the U.S. Bureau of Labor reported today.

This is in line with previous performance and estimates by economists: the economy is weak. It is not adding enough even to keep up with new job seekers entering the workforce. And it is significantly weaker than earlier this year, reflecting the that most observers – some reluctantly – say we are in.

But the other part of the report from the BLS contradicts the first part:

The unemployment rate declined by 0.3 percentage point to 7.8 percent in September. For the first 8 months of the year, the rate held within a narrow range of 8.1 and 8.3 percent. The number of unemployed persons, at 12.1 million, decreased by 456,000 in September.

In September, the number of job losers and persons who completed temporary decreased by 468,000 to 6.5 million…

The number of persons unemployed for less than 5 weeks declined by 302,000 over the month to 2.5 million…

Total employment rose by 873,000 in September, following 3 months of little change…

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

And the number of those not currently looking for work because they believe there are no available for them declined to 800,000, down from 1 million a year ago.

It’s fair to say, then, two things: There will be a slight bump in stocks, at least early in the morning on Friday. Second, many will be looking closely at these numbers – as I am – and wondering what they mean. How can job growth be anemic while at the same time households are reporting that 873,000 more people found work last month?

Here is what one analyst has come up with:

One has to see this as a good report, and certainly better than expected. Consider these key points: Household surged 873k, the labor force rose 418k, and the participation rate rose to 63.6. That of course cannot be sustained, but it is exceptionally strong. Net revisions totaled 86k on the payroll survey. That is the good news. The bad news is that it was virtually all government workers…

Aggregate hours posted a strong gain of 0.4% and the workweek was also solid rebounding back to 34.5 from 34.4, a whisker from the cycle high of 34.6 in February. Earnings were also strong on the month rising by 0.3%, the strongest gain since June and ahead of the expected gain of 0.2%.” — Eric Green, TD Securities.

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