U.S. nonfarm payrolls fell 33k in September, with August revised up to 169k from 186k previously but July was lowered to 138k from 189k. That left the 3-month average at 91k. The unemployment rate dropped to 4.2% from 4.4%. Hourly earnings surged 0.5% versus August’s 0.2% gain (revised higher from 0.1%). Hours worked were steady at 34.4. The labor force jumped 575k after the prior 77k gain, while household employment was sky high at 906k versus -74k in August. The labor force participation rate jumped to 63.1% from 62.9%. As for other job details, private sector employment was declined 40k (versus 135k for ADP). The goods producing sector added 9k, with construction up 8k while manufacturing dipped 1k. The jobs in the private services providing sector slid 49k thanks to a 111k plunge in the leisure/hospitality component. The government added 7k jobs, but Federal employment was flat. There were 1.47 mln people unable to work during September due to weather, the largest since January 1996. The jump in wages and the drop in the unemployment rate will almost guarantee a Fed hike in December.
The dollar popped higher following the negative NFP print, though hurricane disruptions were widely anticipated to impact the report. Upbeat details, such as a surge in hourly earnings, a bump up in the participation rate, and a drop in the unemployment rate to a trend low 4.2% came to the greenback’s aid. EURUSD dropped to 1.1670 from near 1.1715, a near two-month low, as USDJPY hit a near three-month high of 113.32, up from under 113.00.
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