CACIB: Less urgency to hike after September jobs report, though underlying details not as bad - FJElite

September’s jobs report was weaker than expected on the headline measures, with nonfarm payrolls rising just 29K versus 90K expected, alongside 60K of downward revisions to the previous two months. Even so, the three-month average remained at 51K, which may still be around or slightly above breakeven given lower immigration. The unemployment rate edged up to 4.2%, but the increase largely reflected stronger participation, while household employment rose by more than 400K.

Average hourly earnings increased just 0.1% month-on-month, slowing annual growth to 3.0% and reinforcing the view that the labour market is not a major source of inflation pressure. The softer report may reduce the urgency for an October Fed hike, but it does not materially change the broader assessment of a labour market with low hiring and low firing. Inflation data are expected to remain more important for near-term Fed policy, with the base case still for a hold in October followed by another hike in December.