Instant view: Jobless rate drops to 8.6 percent, hiring picks up
NEW YORK (Reuters) - Employment growth picked up speed in November and the jobless rate dropped to a 2-1/2 year low of 8.6 percent, further evidence the economic recovery was gaining momentum.
SETH SETRAKIAN, PARTNER AND CO-HEAD OF U.S. EQUITIES AT FIRST NEW YORK SECURITIES
"I think the 8.6 percent headline was perceived as a positive, but the underlying factors were negative. Given that we've had an 8 percent rally so far this week, I expect a fade. We were sellers on the pop.
"The whisper number was much higher, closer to 200,000, and the fact that we were in-line to slightly lower is by itself a disappointment. The initial jump came on the drop in the unemployment rate, but that's just people leaving the work force."
DAVID RESLER, CHIEF ECONOMIST, NOMURA SECURITIES, NEW YORK
"Part of it is that more people left the labor force. We got a pretty big decline in the labor force, which is stationary, and when the labor force shrinks it means that it's usually people who are unemployed that are leaving. That brings the unemployment rate down.
"Overall this an encouraging report on the labor market. But we shouldn't get too excited that we're going to see four-tenths of a percent decline in the unemployment rate very often. And my guess would be we'll probably see some rebound next month.
"Once word gets out that the job market is improving expect the unemployment rate may even go up because you'll have more people coming back into the labor force...I don't see anything particularly unsettling about this report."
DOUG ROBERTS, CHIEF INVESTMENT STRATEGIST, CHANNEL CAPITAL RESEARCH.COM, SHREWSBURY, NEW JERSEY
"We are descending into a new normal. We are stabilizing into a pattern. It's not exactly something where all of a sudden people are anticipating a major improvement."
ERIC LASCELLES, CHIEF ECONOMIST AT RBC GLOBAL ASSET MANAGEMENT IN TORONTO
"This is a pretty handsome looking report in my mind.
"The U.S. has clearly turned a corner. There was an inflection in early October and since then economic data has mostly been better and surprised to the upside. It's still not consistent with ebullient economic growth, it's far more consistent with sluggish to moderate growth, but even that is very welcome in the context of a global economy that's really suffering right now.
"The U.S. seems to have its act together ... we're seeing that forward momentum. We just have to cross our fingers now that Europe doesn't go horribly wrong because of course that could very quickly snuff out the kind of recovery we're witnessing now."
MARK VITNER, SENIOR ECONOMIST, WELLS FARGO SECURITIES, CHARLOTTE, NORTH CAROLINA
"The payrolls were about in line with expectations, with payrolls rising 120,000, private sector up 140,000 and a drop in government jobs of 20,000. When you look at the composition of jobs you had a big gain in retail, which you would expect going into the holiday season, and we also had a pickup in temporary help, so that the quality of jobs is not as great as you would like to see in the payrolls survey. A lot of the jobs were probably part-time positions and that is one of the reasons average hourly earnings fell."
ROBERT SINCHE, GLOBAL HEAD OF FX STRATEGY, RBS, STAMFORD, CONNECTICUT
"The bottom line is this is a good report, though not a great report. The drop in the jobless rate is consistent with something we've looked at for a long time -- the 'jobs hard to get' indicator from the Conference Board -- and that was down recently to its lowest reading since mid-2009. It might have been a slight disappointment relative to higher whisper numbers, but that was tempered by the big fall in the jobless rate. That said, we doubt it gives too much more upside push to risk appetite. We've seen a lot of improvement lately -- the U.S. data is better, the sentiment surrounding Europe has improved in the last few days on the hope a grand plan, so all that is out there in the market. This is good enough to consolidate the gains we've had. I think the euro around $1.35 is not a bad level at which to end the week."
PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK
"The really good news is that employment has grown for four months running -- in large steps.
"The payroll numbers are generally regarded as more credible than the household survey (on which the unemployment rate is based). There was a solid increase in private employment. Everything there looks steady, but clearly healthy and positive.
"A lot of the drop in the unemployment rate comes down to a decline in the size of the labor force which is quite large. Month to month changes are not very meaningful. We had three month to month increases."