*SCALPSWINGSTRADDLE*

[Zephyr]

Employment Situation
Released On 10/22/2013 8:30:00 AM For Sep, 2013
Prior Prior Revised Consensus Consensus Range Actual
Nonfarm Payrolls - M/M change 169,000 193,00 185,000 155,000 to 240,000 148,000
Unemployment Rate - Level 7.3 % 7.3 % 7.1 % to 7.4 % 7.2 %
Average Hourly Earnings - M/M change 0.2 % 0.2 % 0.1 % to 0.3 % 0.1 %
Av Workweek - All Employees 34.5 hrs 34.5 hrs 34.4 hrs to 34.6 hrs 34.5 hrs
Private Payrolls - M/M change 152,000 161,000 184,000 154,000 to 245,000 126,000
Highlights
The payroll data and household numbers were mixed in September at the headline level but soft in detail. Markets were looking over their collective shoulder at the Fed. Total payroll jobs in September advanced 148,000, following a revised increase of 193,000 for August (originally up 169,000) and after a revised gain of 89,000 for July (previous estimate was 104,000). The consensus forecast was for a 184,000 gain for the latest month. The net revisions for July and August were up 9,000.

The unemployment rate slipped to 7.2 percent after dipping to 7.3 percent in August. Analysts expected a 7.3 percent unemployment rate. But the improvement was largely related to a decline in the pool of available workers, affecting the number of unemployed.

Turning back to payroll data, growth in recent months has been on a slowing trend. Private payrolls gained 126,000, following an increase of 161,000 in August (originally 152,000). The median forecast was for a 184,000 rise.

Goods-producing jobs improved to a gain of 26,000 in September from a rise of 18,000 the prior month. Strength was in construction which jumped 20,000 while mining rose 3,000 and manufacturing edged up 2,000 (sector data are rounded).

Private service-providing jobs increased 100,000 in September after a 143,000 rise in August. The September advance was led by professional and business services (up 32,000), retail trade (up 21,000), and professional & business services (up 32,000). On a negative note, leisure and hospitality fell 13,000 while financial services dipped 2,000. The weakness in leisure and hospitality suggests a cutback in discretionary spending by the consumer.

Government jobs rose 22,000 in September after gaining 21,000 in August.

Wage growth eased in September, rising only 0.1 percent for average hourly earnings, following 0.2 percent the month before. Expectations were for a 0.2 percent gain. The average workweek held steady at 34.5 hours, matching the consensus projection.

Details about the decline in the unemployment rate confirm the view of many at the Fed that it is not necessarily the best view of the labor market. The labor force rebounded 73,000 after dropping 312,000 I August. Household employment rebounded 133,000 after falling 115,000 in August while the number of unemployed dipped 61,000, following a 198,000 drop in August. However, the pool of available workers fell another 183,000 after a plunge of 532,000 in August-resulting in the fourth decline in a row. Again, a low labor force participation rate is at least partly behind the easing unemployment rate.