US Employment (flash) - NFP as expected, Unemployment Rate drops

More Mads Koefoed, 02 December 201102 December 2011 Non-Independent Investment Research The just released US Employment Report was so-so if we focus only on the establishment survey (i.e. Nonfarm Payrolls), but much better than expected if we turn to the household survey (Unemployment Report).

As we discussed this morning the household survey has been very strong in the last (now) four months showing a net gain in employment of 1.282 million, much more than what has been observed (534,000) in the Nonfarm Payrolls series.

Overview for November (October) in thousands: Nonfarm Payrolls at 120 (100, revised from 80) Private Payrolls at 140 (117, revised from 104) Manufacturing Payrolls at 2 (6, revised from 5) Unemployment Rate at 8.6 pct. (9 pct.) Average Hourly Earning MoM at -0.1 pct. (0.3 pct., revised from 0.2) Average Weekly Hours at 34.3 (34.3). Change in Household Survey Employment at 278 (277). Participation Rate at 64 (64.2).

If we focus on the establishment survey then the report was indeed mediocre and the household survey (HS) continues to have the upper hand. The decrease in the Unemployment Rate was divided equally between the aforementioned gain in HS Employment of 278,000 and the decline in labour force participation, which accounted for 316,000 of the total decline in the number of unemployed of 594,000. While not the best of reports, we judge it as midly better than expected on account of the household survey.

Update: The September change in Nonfarm Payrolls was revised up to 210,000 from 158,000.

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