September Non-Farm Payroll Report In Focus

ZIPPYDue to the U.S. government shutdown in early October the U.S. non-farm payroll report for the month of September won’t be released by the Labor Department until early Tuesday morning, eighteen days late.

According to estimates from briefing.com, the U.S. economy is expected to have added 183,000 jobs in September with the U.S. unemployment rate holding steady at 7.3 percent.

Reviewing The Weak Jobs Report from August

The U.S. economy added 169,000 non-farm payroll jobs in August, slightly missing estimates of 177,000 while the unemployment rate dropped to 7.3 percent from 7.4 percent.

The labor participation rate also went down in August to 63.2 percent from 63.4 percent, the lowest level since the summer of 1978.

July’s non-farm payroll number was revised lower to 104,000 from 162,000, the lowest increase since June 2012.

June’s non-farm payroll number was also revised lower to 172,000 from 188,000. The combined revisions for June and July were lowered by 74,000.

Moving Forward From The Budget Impasse

On Friday October 18th after the debt ceiling was temporarily raised and the U.S. government shutdown came to an end, the yield on the 10 year Treasury dropped temporarily to 2.54 percent, the lowest level since July 24th.

That decline came on the heels of Standard and Poor’s (S&P) releasing a report last week that indicated at least 0.6 percent of U.S. fourth-quarter gross domestic product (GDP) growth or $ 24 billion USD was shaved off due to the government shutdown.

On Monday October 21st the yield on the 10- year Treasury moved as high as 2.62 before closing at 2.60 even with the release of slightly disappointing existing home data.

Existing home sales dropped 1.9 percent in September to a seasonally adjusted annual rate of 5.29 million.

That is lower than 5.39 million for August but still  higher by 10.7 percent from last year, the National Association of Realtors said on Monday.

One explanation for the slowing U.S. housing market is rising interest rates that has been occurring in large part to the yield on the 10 year Treasury jumping since May due to the failed expectation that the Federal Reserve would announce in their September Fed meeting that they would gradually taper their $85 billion bond purchase program.

Many economists are now forecasting that the Fed Reserve won’t being to taper until sometime in early 2014, especially with new U.S. fiscal deadlines emerging from December-February and recently nominated Fed Chairman Janet Yellen not coming aboard until Chairman Ben Bernanke steps down in January.

Fed officials will meet again on October 29-30th to discuss monetary policy issues.

About Johnathan Schweitzer 1533 Articles
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