Home > Data Release, Labor Market, US > Payrolls Fall Hard in December, But Revised to Positive in November

Payrolls Fall Hard in December, But Revised to Positive in November

January 8th, 2010 Michael McDonough

December non-farm payrolls fell 85k, compared to a consensus call of no change. November payrolls were revised to +4k from -11k this was the first increase in payrolls since December 2007.  December’s unemployment rate remained at 10.0%, in-line with consensus.  Hourly earnings in December rose +0.2%, in-line with consensus.

Manufacturing  payrolls declined -27k, falling for the twenty-fifth consecutive month, but this was actually slightly better than consensus, which anticipated a -35k drop in manufacturing jobs.   Temp employment continues to rise, which typically is a good forward looking indicator toward employment. Also, I should note, roughly -25K to -30K of the -53K jobs lost in construction could have been due to adverse weather during December.

The bottom line is accommodative monetary policy is here to stay (at least over the next several months), and the employment situation will continue to be a headwind for housing and consumer spending–hence growth.  I still anticipate that payrolls will not bottom until 2Q09, after which it will experience a very gradual recovery.

Retweet
Comments are closed.