The October Jobs report was lower than expected

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Published Date 11/1/2024

Markets waited all week for October employment data; it hit at 8:30 am ET. No news on jobs, the hurricanes set back BLS with little data to report; nevertheless, rates improved. The unemployment rate reported unchanged at 4.1%, average hourly earnings increased from +0.3% to +0.4%, year/year +4.0% up from a revised September, earnings originally reported at 4.0% to +3.9%, the labor participation rate reported at 62.6% down from 62.7%. Rates rallied; non-farm jobs expected +120K reported +12k, private jobs thought to be +90K declined 28K, Wednesday ADP reported private jobs increased 223K. It shouldn’t be a surprise the data would be skewed given what happened with October weather, what does surprise is the reaction to news that has little credibility. A nice surprise mostly driven by very over-extended movements in markets recently. The focus today, the revisions to September jobs, revised from 254K to 78K, private jobs revised from 223K to 192K.

At 9:30 am the DJIA opened +197, NASDAQ +96k, S&P +27. 10 year note at 9:30 am 4.27% -2 bps after declining to 4.22% on the initial reaction to the employment data. FNMA 5.5 30 year coupon at 9:30 am +16 bps and +30 bps from 9:30 am yesterday; the 6.0 coupon +14 bps and +19 bp from 9:30 am yesterday.

At 9:45 am October PMI manufacturing index, expected at 47.8 from 47.3, reported at 48.5.

At 10 am October ISM manufacturing index, the estimate 47.7 from 47.2, reported at 46.5.

September construction spending +0.1% as expected, August revised from -0.1% to +0.1%; year/year spending 4.6% down from 4.8%.

Next week’s calendar doesn’t have anything of consequence prior to the election. Next Thursday the FOMC meeting.

Source: TBWS

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