US Storm-Skewed Report Means Nothing about Anything

<br /> US Storm-Skewed Report Means Nothing about Anything – Marc to Market<br />


The storms that hit the US had a greater
impact on the US labor market than many expected.  
The recorded a net loss of 33k jobs in
September, whereas the market had largely expected around half of the year’s
However, the market is looking past the
headline and sees the drop in the unemployment rate to 4.2% from 4.4% and the
underemployment rate to 8.3% from 8.6%, new cyclical lows. 
this too may be skewed.  The Bureau of Labor Statistics reported
that 1.49 mln people would not go to work due to the weather.  This is the most in two decades. 
Hourly earnings jumped 0.5% in September
to 2.9%. 
 This is the strongest pace since June 2009.
 We worry this too may be distorted.  However, what most assuredly
has not been skewed was the upward
revision to the August series.  It was
revised to 2.7% from 2.5%.  To the extent that there is a signal
from this noisy data, this is it:  There is slightly greater upward
pressure on wages than previously understood.   To be sure, it still lags
behind other cycles, and it will take more than one or two months data to
revive talk of the Phillips Curve, which links the employment to
US interest rates and the dollar rose in
response to the data.
was firm before the report. The US Dollar Index is up for a fourth consecutive
week.  It is the longest streak since Q1.  US 10-year yields are near
2.40%, an area that has blocked stronger gains for nearly six months.
Canada’s jobs report was
not skewed by the weather
, but it appears to be having its own
losing 88k full-time jobs in August, it gained 112k in September.
 Part-time jobs were volatile in the other direction.  Remember, a simple rule of thumb, Canada is 1/10 the size
of the US.  This illustrates the
volatility of Canada’s data.   The unemployment rate was unchanged at
6.2%, while the participation rate slipped to 65.6% from 65.7%.

The main takeaway from today’s North
American jobs report will reinforce what the market was already expecting.
  The Fed will most likely hike
rates in December, while the Bank of Canada is in no hurry to hike rates this
month, which would be the third consecutive hike.  


US Storm-Skewed Report Means Nothing about Anything
US Storm-Skewed Report Means Nothing  about Anything

Reviewed by Marc Chandler

October 06, 2017

Rating: 5

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