After dropping for the first time in 4 years, non-farm payrolls rebounded significantly in month of September. Not only did US companies add 110k jobs last month, but the August number was revised up from -4k to 89k.
Change in Non-Farm Payrolls: 110k Actual, 89k Previous (revised)
Unemployment Rate: 4.7% Actual, 4.6% Previous
Change in Manufacturing Payrolls: -18k Actual, -45k Previous (revised)
Average Hourly Earnings: 4.1% Actual, 3.9% Previous
Average Weekly Hours: 33.8 Actual, 33.8 Previous
After dropping for the first time in 4 years, non-farm payrolls rebounded significantly in month of September. Not only did US companies add 110k jobs last month, but the August number was revised up from -4k to 89k. The tables have turned significantly with this release because it means that the US economy did not actually lose jobs the prior month. There was also a big jump in average hourly earnings from 3.9 to 4.1 percent. Unfortunately, the number was not entirely dollar bullish with the payrolls in the year ended March potentially revised down by 297,000. The market is downplaying this revision because it is focused on the forward outlook for the US economy. This payrolls number eradicates the risk of a recession and puts the possibility of a Fed rate cut at the end of this month at only 50-50. Fed fund futures are now only pricing in one interest rate cut by the end of the year. This expectation will continue to drive the EUR/USD lower and USD/JPY higher.
By Kathy Lien, Chief Strategist of DailyFX.com