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August labor market data an unusually weak aberration - ING

FXStreet (Łódź) - Rob Carnell from ING comments on the US NFP result, which considerably beat expectations in September rising by 248K while the disappointing August figure was revised upwards to 180K.

Key quotes

"Private sector payrolls took a strong boost from the service sector, especially retail trade (+35K) and business services (+81K) and on the public side, even government helped, adding 12K jobs, mainly at state and local levels."

"Helping to prove that the August labour market data were an unusually weak aberration, even the unemployment rate fell to 5.9% (from 6.1%), which was a great outcome given that rounding was working in the other direction."

"The result was helped by a further decline in the labour force (-97K), and a third month of helpful labour force declines next month to push the unemployment rate lower still, is probably asking a bit too much."

"But the chunky decline in unemployment of 329K in September cannot be ignored. This was no staistical quirk."

"However, there were some elements in this release for the doves to cling on to. Wages growth, despite anecdotes of strong hiring, labour shortages and building wage pressure, slipped back to 2.0%YoY from 2.1%, on a 0.0% mom change. This is disappointing."

"That said, with oil prices plunging, and headline inflation in the US likely to fall sharply in coming months, thoughts of a 2Q15 rate hike from the Fed are looking increasingly unlikely, so wages are less of a pivot for policy-makers than they were several months ago when CPI inflation was pushing above 2.0%."

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