Suspicious Minds (What Happened to Payrolls Data?)

The employment data were not out for more than 30 seconds before conspiracy theorists were crying foul. The economy added only 114,000 jobs, according to the establishment survey, but the unemployment rate dropped 3/10ths to 7.8%, a move more consistent with 250,000 job growth. The truth is that the drop was mostly due to part-time employment, probably due to holiday season hiring by retailers. The Challenger and ADP data, released earlier this week, support this theory. The only part of today's data which was "odd" was the expansion of government hiring for July, August and September. We believe that government jobs were created. Our question is: Why were they created. We expect hiring to stay in the low-to-mid 100,000s (unless we fall off the Fiscal Cliff. Unemployment could stay below 8.00%, but that might require further shrinking of the work force. In the end, the numbers were not manipulated, but certain phenomena happened at the right time. Tom Byrne tom@bond-squad.com. www.bond-squad.com www.mksense.blogspot.com 347-927-7823 Twitter: @Bond_Squad Disclaimer: The opinions expressed in this publication are those of the author. They are not, nor should they be considered solicitations to purchase or sell securities.