Highlights
Payroll jobs finally turned positive with today's employment report but the problem is that it was in revised November data. Markets quickly looked past the gain in November as December fell back significantly. Nonfarm payroll employment in December fell 85,000, following a revised gain of 4,000 in November and a revised fall of 127,000 in October. For the latest month, the consensus had forecast a rise of 10,000 in payroll jobs. November and October revisions were down 1,000 net for the two months.

The big miss by analysts for December was in the government component which declined 21,000 in December after rising 4,000 in November. Forecasters had assumed that the private sector decline in jobs in the earlier released ADP report would be offset by a sizable gain in government jobs.

Back to the BLS payroll numbers, the December drop was led by an 81,000 fall in the goods-producing sector which included a 53,000 decline in construction and a 27,000 decrease in manufacturing. Mining was unchanged.

The service providing sector dipped 4,000 after a 62,000 gain in November. The largest decreases were in trade & transportation, down 37,000, and in government, down 21,000. The big positive was a 50,000 jump in professional & business services with temp help jumping 47,000. Temp hiring tends to be a leading indicator for overall payrolls.

On a year-ago basis, payroll jobs rose to minus 3.1 percent in December from minus 3.5 the previous month.

Wage inflation in December was unchanged as average hourly earnings rose 0.2 percent and also matched the market forecast. The average workweek was steady at 33.2 hours in December.

From the household survey, the unemployment rate was unchanged at 10.0 percent in December. Today's report includes household survey data reflecting annual revisions to seasonal factors. November had originally been estimated at 10.0 percent and was unrevised. For December, the market had anticipated an uptick to 10.1 percent.

The economy is in recovery but it is still a jobless recovery. Productivity will be up in the fourth quarter and that will be good for near-term profits. But without a healthy consumer sector, the profits picture is not so rosy. On the release this morning, Treasury yields eased, equity futures declined, and the dollar slipped.

Market Consensus before announcement
The forecasts were updated on January 5.

Nonfarm payroll employment in November edged down only 11,000, following a decline of 111,000 in October and a decrease of 139,000 in September. November's dip was the smallest since the start of recession and came very close to being in positive territory-raising hope that could happen in December. Based on general improvement in initial jobless claims in recent weeks, December payrolls could be positive. Also, employment indexes for both the ISM manufacturing and non-manufacturing surveys posted gains for the month. Yet, ADP's December figure for "private" payrolls showed an 84,000 drop and it will take a sizable increase in government jobs to offset if BLS private payroll numbers match. Forecasters are about evenly divided about whether December's number will be above or below break even. The average workweek rose to 33.2 hours in November from 33.0 hours in October. Wage inflation eased as average hourly earnings in November edged up only 0.1 percent, following a 0.3 percent boost the prior month. From the household survey, the unemployment rate fell back to 10.0 percent from 10.2 percent in October. However, the November decline may have been a statistical correction from October's four-tenths spike.

2010 Release Schedule

Released On: 1/8 2/5 3/5 4/2 5/7 6/4 7/2 8/6 9/3 10/8 11/5 12/3 Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov