US employers added 142,000 jobs in September, below market estimates of 200,000, according to the US Labor Department. The unemployment remained steady at 5.1%, the lowest rate since March 2008, but it would have been higher had the participation rate not fallen by 0.2% to 62.4%. August numbers were revised down from 173,000 to 136,000 and July’s numbers were also revised down from 245,000 to 223,000.
NAB’s David de Garis said, “It certainly caught a lot of investors by surprise. A lot of analysts are wondering what’s going on with US employment right now and whether the payrolls number is correctly reflecting the state of the US labour market.”
ANZ said, “The Fed is extremely unlikely to begin policy normalisation as soon as this month and December is looking tenuous too.” ANZ did caution against relying on one month’s data but noted the broad weakness in the various segment of the report; falling household employment, a lower participation rate, flat hourly earnings rates and downward revisions to the previous two months’ figures. Commonwealth Bank said pretty much the same thing and summed it up as a “nasty combination”.
US bond yields fell as a result, with the 10y rate falling 5bps to 1.99%, a level not seen since May. Australian 10y rates remained unchanged when local markets opened the next business day.
