Education & Events

A More Suprising Loss

By Amanda Parsons - ALM Specialist

According to the Bureau of Labor Statistics report released Friday, we lost 263,000 jobs in September, much higher than the 175,000 expected loss.  This surprised both economists and the markets, sending the S&P 500 down 0.5% the day of the report.  Unfortunately, September marks month 21 of continuous job losses.  As expected, the unemployment rate rose to 9.8%.

In positive news, the Nonmanufacturing ISM Index rose to 50.9 from 48.4 in August.  This index hasn’t been
above the breakeven 50.0 level since August 2008.  The Federal Reserve’s dual mandate is to promote full
employment and maintain price stability.  The weakness in the employment numbers would indicate that
the Fed would be on hold until the employment picture improves but the move of the Nonmanufacturing ISM
above 50.0 indicates some stability.  Do we put more weight on the continuation of weak employment performance
or the positive move by the Nonmanufacturing ISM approximately a year after the start of the prolonged slide that
hit bottom in November 2008 with an Armageddon-like reading of 37.4?