For those who are obsessed with numbers, a whopping 336,000 jobs were created in September, much stronger than the +170,000 expectation, and the biggest gain since January. Once again, the ADP report for last month proved to be a false flag. Private payrolls also jumped by 263,000. Importantly, and reversing the previous trend, two-month revisions were to the good side by 119,000.
The unemployment rate was unchanged at 3.8%, and average hourly earnings also were the same as in August, up 4.2% from year-ago levels and a tick softer than the consensus. Month-over-month average hourly earnings were up just 0.2%, the lightest since February 2022, and actually under what economists were expecting.
The average work week was in-line with forecasts at 34.4 hours as the labor force participation rate was unchanged at 62.8%. Finally, the US underemployment rate ticked down to 7.0%.
Phew! What a relief. Wall Street rallied higher and finished in the green. The Nasdaq Composite closed higher by 1.6%, the S&P 500 advanced by 1.1% and the Dow finished on top by 0.8%. The September payrolls report didn’t change much in terms of my inflation expectations or the direction of Fed policy. How do you impress everyone at a weekend party? Just tell them next week’s CPI report could crash both the bulls and bears. I heard somebody was screaming that long rates are going to 13%.
