US Employment Report (Sep)

The better-than-expected 119,000 increase in non-farm payrolls in September should have further reduced the odds that the Fed will cut interest rates again next month. Admittedly, revisions subtracted a cumulative 33,000 from payrolls in the preceding two months and the unemployment rate did edge up to 4.4%. But the Fed’s September Summary of Economic Projections already allowed for a rise in the unemployment rate, with the median for the fourth quarter at 4.5%. On balance, this report adds to the impression that, although labour demand has clearly weakened, it is not collapsing.