Where are the Jobs?

Friday the Dow Jones opened down, falling as much as 258 points, to only then completely reverse direction and ended the day up 200 points for a more than 450-point swing!  This was the biggest one-day percentage reversal in about four years. What drove the crazy move? This wild move was based on the very disappointing jobs report released Friday morning. Yes, you read that right.  A market rally on a weak jobs report as we return to bad news is good news and wonder, where are the jobs?  Whoop whoop!

2015-10-05 Job Growth Slowing


  • Consensus estimate for new jobs was 201,000 but the actual was 142,000 – 30% below expectations.
  • On top of that grim number, about 60,000 jobs were removed from the prior two month’s estimates, making August’s not-so-bad 173,00 look pretty sad at a revised 136,000 new jobs.
  • This is also the sixth of the past eight reports to have had a downward revision – not a good trend.
  • To rub salt into that wound, the workweek also dropped from 34.6 to 34.5, which doesn’t at first glance look like that big of a deal, but when you put that number across the nation in aggregate… it means effectively an additional 348,000 in job losses!
  • No improvement in wages either, so don’t be waiting to see consumer spending to help out the economy here.
  • The steady unemployment rate is only because more and more people are leaving the workforce, such that the labor force participation rate has fallen to its lowest level since the grim days of 1977 at 62.4% from 62.7%.

2015-10-05 Labor Participation


I’ve been saying for most of this year that I think a rate hike is highly unlikely in 2015 and this market rally shows the market is coming around to my way of thinking.  After Friday’s report, I’d say not only is a rate hike unlikely, but another round of quantitative easing is becoming a real possibility if things continue on this trajectory.  That isn’t to say I think QE is useful, as a matter of fact I think it is quite harmful, but it is the only tune that central bankers seem to know how to sing when times get tough and the rest of the government has basically shrugged off any responsibility for providing a fertile environment for economic growth. Most seem to be more interested in tossing snappy sound bites at each other.  Good times.



I will also be watching very closely how the dollar is going to react as the strengthening we’ve seen could very well be affected by a belief that yet another round of QE is on the way, with the Fed once again joining the ranks of central bankers around the world trying to print their way into prosperity.

Looks like the refrain we’ve been singing for years of “Where are the jobs…. there ought to be jobs,” isn’t going to wrap up anytime soon. This cover is from over 4 1/2 years ago!   Oh and that Afghanistan thing… it’s sorted out right?

2015-10-05 Where are jobs


About the Author

Lenore Hawkins, Chief Macro Strategist
Lenore Hawkins serves as the Chief Macro Strategist for Tematica Research. With over 20 years of experience in finance, strategic planning, risk management, asset valuation and operations optimization, her focus is primarily on macroeconomic influences and identification of those long-term themes that create investing headwinds or tailwinds.

3 thoughts on “Where are the Jobs?

  1. beau duncan - October 5, 2015 at 3:22 pm

    be sure to remove fed govt jobs from the data,
    private industry is probably still growing

    if the GOP gets in , fed govt jobs will
    probably decline

    • Elle - October 5, 2015 at 3:31 pm

      Most of the jobs over the past few years have been from the private sector rather than the public sector as government has been forced to reduce spending from record highs. From August to September the private sector added 118,000 non-farm jobs and the public sector added 24,000. Out of the public sector jobs, there was a net loss of 2,000 from the federal level, an additional 17,000 at the state level and 9,000 at the local level. Keep in mind that unlike private sector jobs, government jobs are paid for either through tax dollars or through additional government debt, so minimizing them helps keep more resources in the productive sector of the economy.

  2. Rick Caird - October 6, 2015 at 1:27 pm

    And, don’t forget the mysterious birth/death numbers which seem to be too high in an era of declining small business start ups. Then, there is the BLS counting of part time jobs as equivalent to full time jobs. That is why the hours worked is so important. The ObamaCare requirement for coverage of employees working 30 hours or more, encourages part time jobs of 29 hours or less.