NFP Analysis and Talking Points
- US Nonfarm Payrolls rose by 134k in September, beating expectations of 185k expected; Prior month revised higher.
- US Average Hourly Earnings in line
- US Unemployment Rate drops to lowest level since 1969
NFP Report Review
US Bureau of Labor Statistics reported total nonfarm payroll (NFP) employment expanded by a 134k jobs in September, disappointing expectations of 185k amid the impact from Hurricane Florence. However, the headline figure saw sizeable upward revision to 270k from 201k, while the 2-month net revision had been +87k. The unemployment rate potentially steals the limelight with a drop to 3.7%, reaching the lowest level since 1969, which will be to the delight of Fed officials given that the see NAIRU at 4.5%.
Wage Growth In-Line, Revision Lower
History suggested that last month’s 0.4% average hourly earnings figure would imply a fall for the subsequent month and indeed that was the case with a reading of 0.3%. However, a slight surprise had been the revision lower for the previous month to 0.3% from 0.4%, consequently this may keep inflation concerns at bay for now. Overall, the jobs report does not change the outlook for the Fed this year with a December hike largely a done deal.
Market Response
A choppy reaction seen in the USD following a relatively mixed report. Supportive factors for the US Dollar had been the drop in the unemployment rate (Lowest since Dec 1969), alongside this, there had been a notable revision to the headline. Slightly disappointing factors had been the Fed focussed wage data in which the monthly figure saw a revision lower to 0.3% from 0.4%.
DXY Price Chart 1: 1-minute time frame (Intra-day)
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