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US Employment Data, September 2013

Tuesday October 22nd 2013

 This is an unusual day as the US Non-Farm Payrolls (NFP) and national Unemployment Rate are normally released by the Bureau of Labor Statistics  on the first Friday of every month. Still as we all know by now the figures for September were delayed due to the 16 day partial shut down of the US government.  The figures are coming out of sequence and that will deminish their impact.
The effect of the shut down will not be incorporated into today's jobs numbers as the shut down began on October 1st so this data set should in theory be immune from the effect. But they were due on October 4th, so any last minute fine tuning or adjustments may have been missed.
The actual data has come at 148,000 which is well below the expectation...but the puzzle is that unemployment has dipped to 7.2% whilst the participation rate has stayed at 63.2%. It is very disappointing that the private sector was not a significant recruiter and that starts to make one wonder what is the underlying momentum within the broader economy. 
NFP is a "change" data point but we not that the rate of change or second derivative has come through at -30,000 following the August revisions.What is a concern is that one has to go back to November, December 2001 and January 2012 as the last time there were three consecutive months of positive second derivative readings for NFP.
That said the fall in unemployment of 0.1% is a positive as since the peak rate of 10% in October 2009 at 10% the average monthly decline has been just -0.0587%.
These figure will do nothing to rush the Fed and as such we still sense tapering is delayed until the New Year. That will undermine the USD on global FOREX markets but will be positive for both equities and US Treasuries.
One should note, however, that the October's data has also been pushed back, by a week, and will now be reported on November 8th. There are questions over how complete the October data may be...so it could well be January when we the December 2013 figures before a meaningful month on month comparison can be made. Still, as far as we can see the US economic calendar should be back to normal for data releases in December, with November's payroll and unemployment data published on December 6th. 

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