Saturday, December 4, 2010

US jobs: Yuck

The "muddle through" theory for the US economy remains firmly on track. US non-farm payrolls rose a disappointing 39k in November. This is well below average market expectations of around 160k. The unemployment rate edged up to 9.8% from 9.6% in October.

The data was weak on all fronts. With government jobs falling 11k in the month, private payrolls only expanded by 50k, but even this was driven by education and health. Construction, retail and my beloved manufacturing sector (where the US recovery needs to come from) all recorded declines.

Hours worked were flat in the month and annual wage growth continued to slow. The only good news was a revision up to October data from an increase of +151k to +172k.

As with the ISM data earlier in the week, data is pathchy and subdued overall. As I said with the ISM data, i'm increasingly convinced the double-dip scenario has been averted, but it's way too early to be expecting any uptick in growth. "Muddle through" still remains the best descriptor of the next few months for the US.