If the Fed was looking for an excuse not to cut later...

If the Fed was looking for an excuse not to cut later this month they have found it with today's jobs report. Employment Situation: September 2007 BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Employment rose in September, and the unemployment rate was essentially unchanged at 4.7 percent, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. Nonfarm payroll employment rose by 110,000 following increases of 93,000 in July and 89,000 in August (as revised). In September, health care, food services, and professional and technical services continued to add jobs, while employment trended down in manufacturing and construction. Average hourly earnings rose by 7 cents, or 0.4 percent. Still the BLS was adding construction jobs and financial jobs at a time when logic dictates we are losing both. The most interesting number was the subtraction of 36,000 jobs from leisure and hospitality. Given that leisure and hospitality has been one of the jobs drivers for quite some time, it may be a category to watch now. Manufacturing continues to be a disaster. 33,000 goods producing jobs were lost of which 18,000 were manufacturing jobs. Note the birth/death model is still adding manufacturing jobs. Also note that of the 110,000 jobs created this month, a whopping 37,000 were government jobs. That means a mere 73,000 private sector jobs were created, many in low paying categories. Health care employment continued to expand in September (33,000), with job gains in ambulatory services and in hospitals. Over the year, health care added 396,000 jobs. Employment in food services and drinking places increased by 25,000 in September. This industry has added 355,000 jobs over the year. Within professional and technical services, job gains occurred in September in accounting and bookkeeping services (10,000) and in management and technical consulting services (10,000). Job losses continued in employment services (-35,000) this industry has lost 203,000 jobs since its recent peak in December 2006. Despite a gain of 6,000 jobs in commercial banks, credit intermediation lost 12,000 jobs over the month. Since February, employment in credit intermediation has fallen by 46,000. In construction, residential specialty trade contractors shed 15,000 jobs over the month and 160,000 since February 2006. Mortgage rates are higher than they were right before the Fed cut 50 basis point and also above where they were a year ago. With this jobs report and the current crisis seemingly averted, I expect the Fed to go on hold at the October FOMC meeting barring another crisis that strikes somewhere else. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.