The US unemployment rate remained unchanged at 9.6% in September based on the US Department of Labor’s household survey. Meanwhile non-farm payrolls dipped 95,000 due to a downtick of 159,000 in government payrolls, numbers below expectations. Private payrolls climbed 63,000 jobs. This was on the low side of expectations.
Given the unchanged headline unemployment rate, Marc Chandler wrote that he believes:
The US employment report was stronger than expected, especially with the revisions to recent months data, but not sufficient to deter expectation of QEII. Moreover the historic benchmark revision show the economy lost 366k jobs more than previous estimated in the 12-months through March. Manufacturing sector lost 6k after 28k decline in August. This suggest the risk of weakness industrial output. Construction shed 21k jobs pointing to weakness in construction spending. Hourly earnings and work week were little changed. The dollar has sold off on the new and new multi-year lows were recorded against the yen below JPY82. The euro and sterling have rallied but have remained below yesterday’s highs. The market remain pulled between over-extended positions and sentiment and continued decline in US rates. The market remains vulnerable to a correction, but the dollar bears still seem to have an upper hand.
I see QEII as pretty much a lock now. I will be on RT Television today at 1PM and we may talk about this in light of the currency war that is a background to the U.S.’s weak employment situation.