Q4 U.S. GDP is out, and the headline print is bad [-0.1% vs. +3.1% in Q3]; lower than most economists’ expectations. This was the first “contraction” since Q2 2009.
The October NFP was pretty good across the board. It showed solid gains with +171K jobs added [vs. 125K consensus, range of +30-145K]. The BLS revised up September to +148K from +114K [plus another +50K for revisions to prior months]. The October unemployment rate ticked up to 7.9% [from 7.8%]. This was in-line with the consensus expectation. But, it’s important to recognize that this +0.1% tick-up was for “the right reasons” as more folks entered the labor force looking for work. Labor force participation rose to 63.8%. This statistic has been in the basement since the recession for cyclical, structural and demographic reasons. The latter will keep it below the long-run trend for some time. However, it is encouraging to see some of those in the first two categories feel optimistic enough to re-engage.
The scorecard is in, and the September employment climate is, well, mixed. Gasp! We know, you’re shocked. When the economy is below trend and the policy environment is uncertain, jobs should be growing on trees, right?