Initial view of employment data is a poor report.
The knee jerk reaction was upward as 83K private jobs were added, offset by some 225K census lost -- hence a net -125K, which was a bit below consensus but not off much. We need about 125K a month just to keep "flat" with population growth.
Unemployment rate fell to 9.5% (versus last month's 9.7%) which on the surface is improvement but once more it's all about the way America counts its unemployed... if you are not actively looking for four weeks you no longer are unemployed in the country. We've stressed labor force participation is at all time lows... and it got worse. 652,000 people "left" the workforce -- dropped out, disappeared, poof, kazam, etc. Hence the labor force participation shrunk even more.
The irony here is if the GOP does not pass extended benefits benefits, the unemployment rate might shrink even further as countless more drop out of the labor force ... which again, by American standards mean they are no longer unemployed.
The labor work week shrunk 0.1 back down to 34.1... another negative. The only positive the bulls had last month was this figure when they claimed an increase of 0.1 work week was equivalent to 300K new jobs. Well, that just went away.
Hourly wages look like down 2 cents.
Birth death model added 147,000 jobs (you can't subtract this directly from any of the figures above), i.e. the government is telling us small business formation and hiring is BOOMING across America yet again.
U-6 (a better reflection of national unemployment) dropped to 16.5% (from 16.6%) which is the only positive but I think it's affected by the same drop off of 650K Americans. I can only assume people are going into some form of underground economy to survive or joining programs (if eligible) like welfare or disability... or simply desperate with nowhere to turn.
Temp workers increased only 20K, which is the lowest I can remember for perhaps six months.
Summary: Your local and national politicians will crow about the "improvement" in the economy due to the unemployment rate dropping to 9.5%. Reality: hundreds of thousands of Americans are disappearing from the official labor force, and have been doing so this entire
recession recovery. No one knows where they are... and the percentage of Americans working versus the total population remains at levels we've not seen before.
S&P futures jumped strongly in the opening moments based on the 9.5% print until details came out and then went back to flat and is now a bit negative. If the market drops below S&P 1120 and stays there we'll exit the index long exposure and see how the day unfolds. I am going to give some leeway since the market is grossly oversold and a ton of bad news has been discounted of late by the nearly 110 point straight S&P drop.