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Maybe we should have remembered that it's still Halloween week. We were all prepared for a bad number, but today's U.S. employment numbers are nothing if not frightening.

This morning the U.S. Commerce Department told us that U.S. non-farm payrolls slipped by 415,000 in October. That's in contrast to an expectation of 300,000 jobs lost. U.S. employment fell by a revised 213,000 in September.

The September number was awful. The October expectation was worse. The October reality was horrific. In fact, the loss in jobs is the sharpest since 1980.

The details do not provide much comfort either.

Employment fell in industrial categories ranging from durable goods manufacturing to accommodation and food services. The only notable exception was government, where employment inched up.

And let's not overlook the unemployment rate. From 4.9 per cent in September, it rose to 5.4 per cent. That takes it to its highest level since 1996. Analysts had figured on it going to 5.2 per cent. And keep in mind that during the recession of 1990/91, the unemployment rate did not hit a peak until more than a year after other parts of the economy had turned around. With the U.S. economy not exactly at the turning point yet, it could have a lot more climbing to do.

And now to Canada, where we did not actually see jobs decline. We go the next-worst-thing though. Canadian employment rose in October, but the trends are solidly in the wrong direction.

According to Statistics Canada, employment was up by 1,800 in the month of October. The number was in sharp contrast to the loss of 20,000 expected by the market. The unemployment rate rose a touch, going from 7.2 per cent in September to 7.3 per cent in October.

But here's the problem, and it's an old problem. Part-time work is rising while full-time positions are dropping. Full-time positions fell by 26,000 last month; part-time jobs rose by 28,000.

Ideally, you would want to see employment rising in both categories. If you could only pick one though, it would be full-time. Full-time jobs pay more, and they mean that workers can spend more. A rise in full-time employment is also a powerful economic indicator. It suggests a commitment, and a degree of optimism on the part of employers that part-time work simply does not.

So much has happened this week.

The U.S. decided it would eliminate its 30-year bond. The Canadian dollar hit all-time lows two days in a row. The economic data has been off-the-charts terrible.

No wonder that nobody seems to have much energy left to react to today's numbers.

In the U.S. bond prices went up and yields dropped a little on the release of the U.S. jobs numbers. That makes sense. Weak economic data suggests interest rates are headed down, which makes existing bonds look more attractive. Still, the fixed-income markets have had such a wild ride this week that the reaction was much less than it might have been.

Canadian bonds hardly reacted at all. Why would they? Falling rates help bonds. A falling currency does not. And although the loonie seems to have plateaued at about 62.66 cents U.S. (gulp), nobody thinks it could not fall further.

Mr. Greenspan moves to center stage next week when the Fed meets.

Stay tuned.



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