Having served as the linchpin for the bond market for the last 20 years, the Nonfarm Payroll report released last month was a shocker, according to Dwight Johnston, VP of economic research at Wescorp.
The shock, he said, was the "huge and inexplicable" revisions making some question the veracity of the numbers from the Bureau of Labor Statistics. Johnston said yields rose after that report, but then yields fell, as the rest of the economic data on the month was weak.
"The bond market seemed to put behind it the questions of the payroll report. Surely that was a one-month experience. In the latest report issued Nov. 3, we learned that it was not a one-month experience. In fact, the revisions and questions this latest report brought us, make most in the bond market believe that the once reliable report from the Bureau of Labor Statistics should now be viewed only with great skepticism," he wrote.
Johnston said the report of a relatively weak 92,000 job gain in October was followed by still more big revisions to prior months and that last month's reported 51,000 gain was revised to 148,000. The August gain has now been revised from a modest 148,000 to a robust 230,000. The Bureau of Labor Statistics gave no explanations, he wrote. Johnston also said the report stated that the Unemployment Rate magically fell from 4.6 percent to 4.4 percent, the lowest rate in five years.
"The Unemployment Rate is derived from a survey sample of 60,000 households," he reported. "Based on this survey, the BLS says that a whopping 437,000 jobs were created in October."
