The US Employment Situation Report Was a `Surprise` by Richard Rhodes (10-OCT-05)
Richard Rhodes and his team are not totally surprised given the report once again proved just how useless trying to forecast it really is. Consensus was for a drop of -170k, but the drop amounted to only -35k. Hence everyone was made to look rather foolish.
The Labor Department reported that hurricane Katrina subtracted a rather large -235k from the report, but more modest than first thought. This was a strong report to be sure, and one that was made all the more strong by the prior month revisions of +77k.
Overall, this strength is consistent with a “hawkish” Fed remaining just so; keeping them focused upon their “measured path” towards higher rates for the foreseeable future.
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