The Number: This is definitely weaker than expected. Massive cutting on the public sector level really was the culprit. The losses were split between census and non-census employees.
Average hourly earnings were unchanged.
The private sector did create 64,000 jobs.
Markets aren’t doing too much either way, actually. Perhaps it’s because the private sector number wasn’t a disaster that the market isn’t too concerned.
Here’s the key paragraph:
Nonfarm payroll employment edged down (-95,000) in September, and the unem- ployment rate was unchanged at 9.6 per cent, the U.S. Bureau of labour Sta- tistics reported today. Government employment declined (-159,000), reflec- ting both a drop in the number of temporary jobs for Census 2010 and job losses in local government. Private-sector payroll employment continued to trend up modestly (+64,000).
See charts on the drastic state revenue collapse causing the massive layoffs >
Background: The headline job creation number is expected to be zero, although there has been a range of estimates. Goldman is expecting a loss of 50K.
Of course, the Census department cut more jobs in September, so much of the focus will be on the private sector job creation.
The unemployment rate is expected to tick up just slightly, to 9.7%.
Obviously the report has huge ramifications for the quantitative easing that the Fed will be considering at its meeting November 2-3. For more background see here.
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