Economists React to Payroll Announcment

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Friday’s report showing nonfarm payroll growth of 96,000 jobs in September was well shy of most economists’ expectations for more robust gains. Here’s what they’re saying about the data.
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“Looking at the sector details the report shows a very disappointing 18K drop in manufacturing, the first in three months and much worse than is implied by the ISM manufacturing employment index.”
– Ian Shepherdson, High Frequency Economics
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“Accelerating earnings indicate some tightening in the labor markets despite relatively sluggish payroll gains. As earnings continue to rise they will help sustain real consumer spending.”
– Steven A. Wood, Insight Economics
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“We see nothing here to discourage the Fed from raising rates a further 25 basis points on November 10. … Kerry can point to 585,000 payrolls lost during the Bush administration (after factoring in the benchmark revision). Bush can point to 1.69 million jobs created according to the household survey!”
– John Ryding, Bear Stearns
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“Job gains are not a convincing story for the a sustained expansion of the economy. Yet, employment gains are edging higher in a period of high uncertainty regarding oil prices and heavy storm weather for the southeastern portion of the country.”
– Stephen Gallagher, Societe Generale
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“The much ballyhooed announcement of the preliminary estimate of the benchmark revision to be released on February 4, 2005 was anticlimactic. The Labor Department estimates a 236K upward revision … This was at the lower end of most estimates, and is not a large revision by historical standards.”
– Joshua Shapiro, Maria Fiorini Ramirez
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“The biggest surprise in the report was that the BLS failed to provide their own estimate of the impact of the hurricanes on September payrolls.”
– David Greenlaw, Morgan Stanley

[BLR Note: Actually, this is incorrect: "BLS made additional data collection efforts for the hurricane-affected counties. Establishment survey response rates in September were within the normal range for these areas as well as for the U.S. as a whole . . . In the household survey, people who miss work for weather related events are counted as employed whether or not they are paid for the time off. ]
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“Once again, the conflicting evidence from the household and establishment surveys add to the confusion about overall labor market conditions. Indeed, the household survey itself contained apparently conflicting data. … There’s nothing here to alter either the political ‘spin’ about the job market or the course of monetary policy.”
– David Resler, Nomura Securities International
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Sources:
Economists React
WSJ, October 8, 2004 12:56 p.m.

http://online.wsj.com/article/0,,SB109724343898240406,00.html

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