Job Market In Recession Even If The Economy Isn’t

Nonfarm payrolls surprised to the downside, with the most cyclically-sensitive sectors in outright decline.

As we expected, U.S. nonfarm payrolls came in light in December, with a meager +50k versus the consensus forecast of +70k. And many of the details were soft. Downward revisions to the prior two months amounted to -76k. Tack on the fact that the workweek contracted by -0.3% MoM to 34.2 hours from 34.3 hours in November, which means that, in total labor input terms, employment really declined by -408k last month. This was validated by the fact that the companion Household Survey, when measured on an apples-to-apples basis to the Establishment Survey, showed a net employment contraction of -143k.