Payrolls up 248,000 in September – much stronger than expected, August revised up sharply
Non-farm payrolls increased by 248,000 m-o-m in September, versus 180,000 (revised from 142,000) in August. The reading was much stronger than the expectation of 215,000. Government payrolls rose by 12,000 in September versus 5,000 in August. Thus, private non-farm payrolls increased by 236,000 in September, versus 175,000 (revised from 134,000) in August. That was much stronger than the expectation of 210,000. Finally, unemployment declined to 5.9 percent in September, from 6.1 percent in August. Consensus expected an unchanged reading. Earnings and hours of all employees Average hourly earnings remained unchanged in September, versus an increase m-o-m by 0.3 percent (revised from 0.2 percent) in August. Consensus had expected 0.2 percent. Average weekly working hours rose to 34.6 in September, versus 34.5 percent in August. Consensus expected an unchanged reading.Fed to raise rates as unemployment hits 5.6-5.7 percent, pointing to a first hike in January
The Fed will likely hike rates as the unemployment rate drops to 5.6-5.7 percent, just above the natural rate, which at present Fed officials assess at 5.2-5.5 percent. Fed Chair Janet Yellen is strongly advocating such a move, which she calls an “optimal policy” response. Our view is that this will take place by the end of the year, indicating a first rate hike at the interest rate meeting in January 2015.
