Boockvar on Rick Santelli, Jobs Numbers
The following is from Peter Boockvar:
Farewell to a legend/Oh, the jobs data too
With his last day today as a regular on CNBC, I have to express my huge admiration for this guy. Rick Santelli is a financial news legend that I will miss watching every day. He’s a man of passion who loves the markets and that will never change even though he won’t be reporting on it each day. I am so lucky to call him a good friend.
Oh, on to the jobs data.
Payrolls were softer than expected, rising 29k in September and below the estimate of 90k. The prior two months were revised down by a total of 60k. Of this, private sector jobs grew by 46k vs 89k in the month before (down from the initial print of 127k) with a drop in government.
The household survey reflected strong job growth, though this is a very volatile monthly number, rising by 406k but because it didn’t keep up with the rise in the labor force of 485k, the unemployment rate ticked up to 4.2% from 4.1%.
Hours worked were unchanged at 34.4 while average hourly earnings disappointed with just a one tenth m/o/m gain and higher by 3% y/o/y. Combine the two and average weekly earnings were up 4.2%. The all in U6 rate though fell one tenth to 7.6%.
Seen in the rise in the labor force, the participation rate was up by 2 tenths to 61.8% and that matches the most since March. The key 25-54 yr old cohort saw an unchanged participation rate of 83.4%.
Of the 46k private sector net jobs created, it was led again by healthcare/social services which contributed 23k. Trade/transport/warehousing hired a net 24k followed by leisure/hospitality which added another 10k.
On the slip side, jobs were lost in information, financial services and business services.
Construction continued to be an area of job growth, with another 11k added. Manufacturing’s recovery, helped by making things going into data centers, along with inventory restocking, saw a 9k person hiring uplift.
Smoothing out the monthly volatility, the 3 month job gain average is 51k vs the 6 month average of 66k and the 12 month average of 41k. For perspective, in 2019 the monthly job gains were 165k.
Bottom line, the debate continues as to what the monthly job gains are needed in order to satisfy the increases in the labor force which we know have slowed. I’ve seen estimates everywhere from zero to north of 50k so the 3 month average is kind of in the range.
Treasury yields are seeing further relief, falling post softer than expected number. I’ll say again that we won’t get an October rate increase and not even worth guessing about December as it’s too far away.
