September Jobs Recap : Snap back to reality

Key arguments

• September payrolls of 29k missed the 90k consensus and followed a downward revision of August's gain from 162k to 133k, reinforcing an existing deceleration rather than a break in trend.
• The three-month and twelve-month average payroll gains, at 51k and 41k, remain above estimates of breakeven rates that would stabilize unemployment.
• Rising participation lifted the unemployment rate slightly to 4.175% (rounding to 4.2%) and wage growth eased to 0.1% m/m, so the labor market adds no inflationary impulse.
• With inflation still the Fed's primary concern, this data reduces the urgency to hike in October and possibly December, and Natixis expects only one further hike versus market pricing.

Corresponding source evidence

1. Payrolls rose just 29k, falling from the (revised lower) print of133k inAugust and the broad trend suggests still that the labor market issolid, but unspectacular.
2. The three-month rate ofpayroll gains stands at51k while the yearly gains averages 41k, both above most estimates ofbreakeven rates that would stabilize unemployment.
3. The labor market, importantly, isnot adding to any inflationary impulse, with wage growth even lower than the typically tepid gains in the last year, rising only 13bps m/m.