On the October Jobs Report

A big beat is actually a huge one, by as much as 158,000 payrolls. The consensus probably didn’t embed the 20,000 drop in census workers, nor the 95,000 upward revisions to prior months (which we had anticipated). There is no recession evidence here. Quite the contrary, with the labor force participation rate making new expansion highs. That drove the unemployment rate slightly higher. Combined with sluggish wage growth and yesterday’s downtick in core PCE inflation, we couldn’t ask for a more dove-friendly way to have a big upside surprise in jobs.