Breaking: US NFP rose by 336k in Sep as payrolls slipped to 4.2%

October 06, 2023 11:34 PM AEDT | By Invezz

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Breaking: US NFP rose by 336k in Sep as payrolls slipped to 4.2% — Image source: Invezz

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The US economy added over 336k jobs in September even as the country continued facing multiple headwinds. Economists polled by Reuters were expecting the non-farm payrolls (NFP) to come in at 170k.

Private non-farm payrolls rose by 263k in September, higher than the ADP estimate of 89k. Also, the BLS revised its August NFPs from 189k to 227k.

The unemployment rate, which looks at the percentage of people out of work, rose to 3.8% from the previous 3.7%. Most importantly, the U6 jobless rate, which is seen as a more accurate representation of the labour market, remained at 7.1% during the month.

While the unemployment rate and the NFP data was important, traders were watching the average hourly earnings figure. The Bureau of Labor Statistics (BLS) said that the average hourly earnings rose by 0.2% in September, translating to a YoY increase of 4.2%.

These numbers mean that the Federal Reserve will be inclined to maintain a hawkish tone in the coming meetings. In its September meeting, the Fed’s dot plot pointed to another 0.25% rate hike.

The NFP data came at an important time for the American economy. Labor unions have continued striking and demanding higher wages. UAW workers are asking for a 40% wage. On Thursday, workers at Kaiser Permanente also went on strike.

At the same time, inflation is still a big challenge. The headline consumer price index (CPI) rose to 3.7% in August and likely retested 4.0% in September as the cost of gasoline jumped.

Most importantly, a major bond sell-off is going on as US budget deficit widen. The 30-year yield soared to 5% for the first time since 2007. Similarly, the 10-year yield soared to 4.7% while the US dollar index has risen to $107.

The post Breaking: US NFP rose by 336k in Sep as payrolls slipped to 4.2% appeared first on Invezz

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