The Labor Department reported this morning that the nation's payrolls contracted by a net total of 95,000 in September. The latest rounds of layoffs from the government trumped what hiring was done in the private sector, leading to the rather nasty number.

According to the Labor Department, local governments jettisoned 76,000 jobs last month -- most of them in education. This cut was the largest by local governments in 28 years. Also, 77,000 temporary census jobs ended in September. Offsetting these two figures somewhat was the private sector, which added 64,000 last month.

Stocks stumbled dramatically lower on Friday, pressured primarily by the Labor Department's disappointing nonfarm payrolls report. Options traders took out their frustration on a likely suspect: job-listings specialist Monster Worldwide (MWW), which garnered a glut of bearishly biased volume on Friday.

During the course of the session, in fact, put activity surged to 17 times the expected level on MWW, with 6,265 contracts crossing the tape. Most active was MWW's June 12.50 put, where 5,308 contracts changed hands. About 78% of these puts traded at the ask price, indicating they were purchased. Open interest at this out-of-the-money put rose over the weekend by 4,756 contracts, confirming that new bearish bets were added here on Friday.

Several factors converging on the metals markets are causing a sell off.

First, China has taken steps to curb bank lending. Much of the Chinese stimulus money has gone into the purchase of raw materials. Now, with things cooling down, traders are less willing to stockpile base metals.

Second, U.S. payrolls fell by 20,000 last month, indicating sluggishness in the U.S. economy.

Wednesday morning, the ADP index announced that private-sector firms shed 84,000 jobs in December.

Although this was the fewest jobs lost since March 2008, December marked a 23rd-straight month where jobs were lost. Looking back at the number of jobs lost during November, ADP revised the number lost to 145,000 from the original 169,000. Remember, the ADP index does not take government jobs into account.

Here's a great surprise: Job losses slowed dramatically in May.

Let's look at the numbers:

• Non-farm payrolls dropped 345,000. Economists had expected a drop of 525,000.
• The economy has lost 6 million jobs since December 2007.
• The unemployment rate jumped to 9.4%, the highest since August 1983.
• Economists expect to see 10% unemployment soon.

After a brief selloff yesterday, oil prices have been moving higher in today's action. Buyers have come back into the market today and pushed prices up as high as $95.00 earlier in the session, Prices nd are now up $1.20 to $94.69.

The main reason why prices have turned higher today is optimism about the economy created by this morning's better than expected October payroll report. According to the U.S. Labor Department, October saw a 166,000 increase in payrolls, which was more than twice the 80,000 increase that analysts expected.

The better-than-expected payroll report was enough to create some optimism of the overall economy, and put some recession fears to rest. According to Michael Lynch, who is president of Strategic Energy and Economic Research Inc., "It suggests that concerns about the economy ... are overblown a little bit."