September jobs report: -159,000 jobs
* The economy shed 159,000 jobs in September, up from a reading of -73,000 in August and the worst decline since March 2003 (-212,000). The separate household employment survey showed a loss of 222,000 jobs, compared with a reading of -342,000 in August.
* The unemployment rate held at 6.1%, the highest reading since September 2003.
* Average hourly earnings rose 0.2%, down from an increase of 0.4% in August and the smallest gain since April of this year.
* The diffusion index, which measures how many industries are cutting jobs against how many are raising them, worsened. The private nonfarm diffusion index sank to 38.1 from 44.7 in August. That's the worst reading since June 2003.
* Manufacturing lost 51,000 jobs, construction lost 35,000 jobs, and the service sector shed 82,000 jobs. Losses were widespread in retail, trade, transport, and the financial sector. Job growth in former stalwart sectors like government (to +9,000 from +31,000) and education and health slowed (to +25,000 from +59,000 a month earlier)
All the fear gauges (bond prices, stock prices, swap spreads, and so on) retreated after the news. In other words, bonds gave up gains, stocks spiked and swap spreads came in, probably on some combination of "well, it wasn't as awful as it could have been" and "phew, this means the Fed can cut rates." We'll see if it sticks.