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Investing Specialists

Early Holiday Hiring Torpedoes Jobs Report

A strong October led to a disappointing November.

Unexpectedly large increases in manufacturing sectors across the world combined with incredibly strong retail sales data for November drove markets sharply higher for most of the week. While the employment report on Friday was weaker than anticipated, markets took the news in stride, as many analysts raised questions about how to properly analyze the report. As I detail below, averaging October's strong outperformance and November's disappointing results, employment growth was mired in the same 100,000 jobs per month range as it has been for almost all of 2010.

Surprisingly, real estate data this week was good, with pending home sales increasing at its fastest pace since 2001, and overall construction spending managing to eke out yet another month of growth. Meanwhile, home prices deteriorated modestly, in line with expectations.

A wee bit more clarity on the Irish debt crisis aided market sentiment for the week as well. The national purchasing manager report for the services sector also turned in one of its best performances of the recovery, with its employment index showing particular strength. Softness in the services sector had held back the recovery in earlier months of this year.