Data Flash: +151,000 Jobs. Hourly Earnings Up. Work Week Longer

The October Employment Situation Report has been released.  Nonfarm payrolls grew by 151,000, this was much better than calls for a +60,000 print. The private sector added 159,000 jobs vs. estimates for a read of +75,000. The Unemployment Rate was unchanged at 9.6%. Average Hourly Earnings were up 0.2% and the Average Work Week rose to 34.3 hours from 34.2.

Plain and Simple: IMPROVED AND BETTER THAN EXPECTED IN EVERY KEY METRIC BESIDES THE HOUSEHOLD SURVEY (U/E RATE)

Reuters Quick Recap....

RTRS-U.S. OCT NONFARM PAYROLLS +151,000 (CONSENSUS +60,000) VS SEPT -41,000 (PREV -95,000), AUG -1,000 (PREV -57,000)

RTRS-US OCT PRIVATE SECTOR JOBS +159,000, LARGEST MONTHLY RISE SINCE APRIL, (CONS +75,000), SEPT +107,000 (PREV +64,000)

RTRS-U.S. OCT GOVERNMENT JOBS -8,000 VS SEPT -148,000 (PREV -159,000)

RTRS-U.S. OCT JOBLESS RATE 9.6 PCT (CONSENSUS 9.6 PCT) VS SEPT 9.6 PCT (PREV 9.6 PCT)

RTRS-U.S. OCT AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +0.2 PCT (CONS +0.1 PCT) VS SEPT +0.1 PCT, TO $22.73 VS SEPT $22.68; OCT YEAR-ON-YEAR EARNINGS +1.7 PCT

RTRS-U.S. OCT AVERAGE WORKWK ALL PRIVATE WORKERS 34.3 HRS (CONS 34.2 PCT) VS SEPT 34.2 HRS, FACTORY 40.3 VS 40.2, OVERTIME 3.0 VS 3.0

RTRS-U.S. OCT FACTORY JOBS -7,000 (CONS +5,000) VS SEPT -2,000 (PREV -6,000)

RTRS-U.S. OCT GOODS-PRODUCING JOBS +5,000, CONSTRUCTION +5,000, PRIVATE SERVICE-PROVIDING JOBS +154,000, RETAIL +28,000

RTRS-U.S. OCT AGGREGATE WEEKLY HOURS INDEX FOR ALL PRIVATE WORKERS +0.4 PCT VS SEPT -0.2 PCT

RTRS-TABLE-U.S. Oct nonfarm payrolls rose by 151,000
 

Market Reaction....

10 yr yields up to 2.567% from 2.516%.Yield curve 5bps steeper at 222bps.  5s up from 1.056 to 1.071%.

FNCL 3.5 prices down from 100-30 to 100-23. FNCL 4.0s down from 103-23 to 103-17.  CC MBS seem to be pacing 5s.

This will test the market's conviction to buy the dips. Let's see how it plays out.