Fundamental Reports

October's Non Farm Payrolls brings the job market squarely to recessionary territory. In just one elapsed quarter the three month moving average has more than doubled from -98,000 in August to -217,000 in October. The speed and magnitude of the decline in the job market also underlines the severity of the September credit contraction and its devastating impact on the job market. The relatively modest monthly job losses from January through August (average -81,875) were consonant with weak economic growth but not contraction. Jobs are normally a trailing indicator but a number of indicators (industrial production, retail sales, consumer sentiment, factory orders, ISM) had minor late summer improvements which did not affect payrolls. Have payrolls temporarily become a leading indicator or are the job losses directly related to the extraordinary pressures on business exerted by the credit market freeze in late September and October?

Regards,