We don't expect to be disappointed by October's payroll employment report on Friday. Both September's JOLTS report and October's consumer confidence survey suggest that the labor market remains in good shape. Better yet, it may be improving. The impact of bad weather and strike-related layoffs will make a dent in October's payroll employment number, but that doesn't mean the jobs market is weakening.
Financial markets seem to be sensing that. The S&P 500 turned positive this morning after both labor market reports were released. The latest data confirm fixed income investors' concerns that the Fed is stimulating an overheated economy that continues to be stimulated by large federal government budget deficits (chart).
Here's more on today's data:
(1) JOLTS. Payrolls rose 362,000 in September according to our JOLTS-based proxy, which subtracts separations from hires (chart). That more than confirms September's strong 254,000 jump in payroll employment.
