Today's non-farm payrolls report had little for the bulls to sink their teeth into. After a stronger than expected ADP Employment Report, multi-year highs in the employment component of the ISM Manufacturing and Non-Manufacturing reports, and the largest monthly drop on record in mass layoffs for the month of January, Non-Farm Payrolls for the month came in well short of expectations (+36K vs +140K).
The only bright spot in today's employment report was a surprising drop in the unemployment rate which fell from 9.4% to 9.0% for its second straight monthly decline of 0.4%. In fact, over the last two months the unemployment rate has declined by 0.8%, which is the largest two-month decline since 1958. While part of this decline is attributable to the fact that people are dropping out of the work force (bad thing), unlike the payroll survey -- which has shown anemic growth in jobs -- the household survey (which the unemployment rate is based on) has been showing much stronger growth.
While both sides will spend the day and weekend arguing over the merits of each survey, the bottom line is that an unemployment rate of 9.0% sound a lot better than the 9.8% level two months ago or the 10.1% rate we saw in October of 2009.
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