Art Hackett:
But first, figures released today by the U.S. Bureau of Labor Statistics shows the nation's economy lost only 11,000 jobs in November. To put that in perspective, over the last three years some months have seen losses in the hundreds of thousands of jobs. This month's numbers up in the right-hand corner look like a little dot. Is that good news? It's such good news, the first reaction was, ‘That can't be right.’ Jay Mueller is a portfolio manager for Wells Fargo advantage funds. He's with us in Milwaukee. Good evening, Mr. Mueller.

Jay Mueller:
Good evening.

Art Hackett:
First of all, did this low number come as a surprise to you?  

Jay Mueller:
It was a surprise. The market had been looking for something like a minus 125,000 number. Personally, I figured it might be anywhere between about minus 50 and minus 150. These numbers tend to be quite noisy. There are a lot of adjustments. There are a lot of seasonal factors and so forth. But coming in at almost flat, only a minus 11,000, was better than almost anybody had been expecting or perhaps I should say less worse, less bad than anyone was expecting. It's still not good news in the sense of job creation, but compared to where we've been over the last two years, it's quite an improvement.

Art Hackett:
I notice that they revised the numbers for the two previous months, so they're lower than they were projected earlier. Does that indicate that this is may be a stronger change than we were anticipating?  

Jay Mueller:
It certainly adds to the story, yes. In each of the last two months, about 80,000 jobs were added back into the total. Now, both of those months were still negative in terms of payrolls overall, but by less than had originally been estimated. It's not at all unusual to have significant revisions, but those were pretty good revisions, both in the same direction, so that's quite encouraging. We shall see. It could very well be that when we get today's data revised a month from now, that we'll actually see a positive symbol in front of the net change. We don't know that for sure, but it's certainly a possibility.

Art Hackett:
This is the season when retail merchants essentially make it or break it for the year. And are these new numbers going to make shoppers a little bit looser with their pocketbooks than they might have been in the past?  

Jay Mueller:
I think it's possible. I wouldn't expect too much of a bump from it. If you think about the spending of the average consumer, it's pretty heavily dependent upon income. If you've got money to spend, you'll spend it, unless you're really terrified that you're going to lose your job or something. So to the extent that there's a change in psychology, a little bit less fear from seeing those unemployment numbers dip slightly, it could make people a little bit more inclined to spend. But at the end of the day, psychology can only go so far. We've got to get some income growth in order to have a sustainable increase in consumption.

Art Hackett:
I know you're involved with managing portfolios for mutual funds. I'm curious, the stock market was sort of mixed about this today. They didn't quite know what to do with it. Why was that? 

Jay Mueller:
Good question. We were kind of scratching our heads about that all day today. We did initially get a very positive reaction. But even then, it wasn't quite as exuberant as you might have thought, considering that this was really an upside surprise. I think part of the explanation is the fact that the stock market's actually been doing quite well lately. We're up considerably from the very low levels of the spring, when it seemed like there was a good chance the world was coming to an end. And certainly in recent weeks the stock market has been pushing to new highs for this recovery. So perhaps an awful lot of the good news was already reflected in the market prior to today's data. That's one explanation. Another explanation I think is simply that an awful lot of the improvement in financial markets over the last six to nine months has come from a very, very expansive monetary policy. And seeing the early signs of improvement in employment means we're probably that much closer to the federal reserve becoming a little bit less free with the monetary stimulus. So overall that's a good development. But in the sense of — to the extent that markets were being buoyed up by this flood of liquidity, if the liquidity ebbs a little bit, there might not be so much support.

Art Hackett:
Quick last question on what this means for Wisconsin. These are national numbers. How closely does Wisconsin's labor market track the national numbers?

Jay Mueller:
There's a lot of variation. It is certainly true that historically Wisconsin has been more manufacturing heavy than the country as a whole, and the news on manufacturing is still not good. We still saw a fairly substantial drop in manufacturing employment for the month of November. In fact, manufacturing employment in this country is currently at the same level that it was in early 1941.

Art Hackett:
Wow.

Jay Mueller:
If you can believe that. It's just a staggeringly low number. So that's not good news, that manufacturing continues to be weak. The better news is that some of the hardest-hit states in this recession have been those that were most dependent upon construction, particularly residential construction. And since Wisconsin didn't really participate to much of an extent in the big building boom, we have not suffered quite as much from the construction bust. So it's kind of a mixed picture for us.

Art Hackett:
Jay Mueller, thank you very much for joining us.

Jay Mueller:
Thanks for having me.