An October surprise on the jobs front

We just got the October jobs report from the Bureau of Labor Statistics. Boy were these figures a surprise ...

* Nonfarm payrolls jumped by 166,000 in October, up from a revised 96,000 in September and far above the consensus forecast for +85,000. The household employment survey, which is generally considered less important than the business survey, was more subdued. It said household employment fell by 250,000 after rising by 463,000 a month earlier.

* The unemployment rate held steady at 4.7%. Meanwhile, average hourly earnings rose just 0.2%, down from 0.3% a month earlier and below the 0.3% forecast.

* So which industries did well and which ones did not so well? Construction lost another 5,000 jobs and manufacturing lost 21,000. Retail trade lost 22,000. But leisure and hospitality employment was up sharply (+56,000), as was health care and social services (+35,000) and business services (+65,000). Government hiring was a hefty 36,000.

The bottom line is that housing remains in recession, but the overall economy is still muddling along. So not great, but not awful either. I'm keeping a close eye on the 114 level on the long bond futures. As you can see in this chart, this is a significant area of technical resistance. If it holds and we reverse lower in price (higher in yield), I figure we could see 110 in the coming weeks.