Warm Glass of Coke

The Labor department just released the October nonfarm jobs report and it was okay, kind of like a glass of warm coke which is now lost its zest.  Total payrolls added 80,000 and September was revised from 103k to 158k and August went from 57k to 104k so when taken in unison it was 187,000 higher which lowered the unemployment rate to 9.0% from 9.1%.  We need to be adding over 200k a month just to keep up with employment trends and closer to 400k a month to dig us out the hole we are in.  The average workweek was flat at 34.3 hours and earnings were also flat at 0.2% so employers were neither working their employees longer nor paying them more and both need to happen in consecutive months to create a trend you can believe in.  Private payrolls added another 104k but 117k was expected so put this in a bowl and stir it all up what you get is a rather thin cake batter or weak uninspiring job market.  I have been saying for months that the data doesn’t indicate we are headed for a double dip recession but rather a long protracted slog until the tone and rhetoric from Washington DC changes to a more business friendly song.  One confusing area in the report was the drop in unemployment from 9.1% to 9.0% when only 80k jobs were created, this could be explained by the very high birth/death rate of about 500k. The labor department uses this rate to estimate the opening and closing of new businesses, this is a controversial number as it is completely unpredictable and varies widely.  The trend is the most important thing and therefore looking at the weekly jobless number that has been dropping below 400k for the last month is indicative of an economy that is trying to gain traction.  Despite what Washington may spin on this, it is a warm coke report that has lost its zest.