Another month, another miserable employment report.
And another happy day for the stock market.
Wall Street rallied on Tuesday after the delayed employment report for September showed just 148,000 jobs were created. Market pros were expecting 180,000 jobs — a relatively upbeat figure that seems seared on Wall Street’s collective brain despite the fact that the optimism never pans out.
I predicted that September would be lousy.
In fact, the only thing that surprised me was that the growth wasn’t more miserable.
The Labor Department also announced that the unemployment rate declined to 7.2 percent, which is another exercise in deceit since it only dropped by 0.1 percent point because more people gave up looking for work.
The 800,000 government workers who were on paid vacation during the Washington shutdown — euphemistically known as a “furlough” — didn’t count in yesterday’s report.
The September employment report had one strike against it from the start: It is one of only three months in which the government doesn’t pump up the figures with a generous guess for jobs created by newly formed companies that may not really exist.
The Labor Department actually subtracted 26,000 jobs for small companies that might have closed without the government knowing it.
In the spring, this guess, called the Birth/Death Model, adds hundreds of thousands of phantom jobs a month.
The Labor Department also performed some razzle-dazzle by changing definitions. Workers in people’s homes had not been counted as employed until they became categorized in March as being part of the education and health-care services industry.
That change has added to the job count each month since March. But there’s no way of knowing how much of an influence the re-categorizing has had on the headline number.
So why is Wall Street happy that the economy is doing poorly? Because it seems to put an end, at least for a while, the idea that the Fed will have to stop printing trillions of extra dollars as part of its quantitative easing experiment.
Wall Street has gotten rich off QE — even if you haven’t.
Like it or not, the Fed is stuck with QE.
The economy is just not performing well enough to take it off the Fed’s respirator.