September Employment: Wow

Summary The September employment was strong across-the-board. Nonfarm payrolls grew at a robust 336K pace in the month, and upward revisions to job growth in July and August further flattered the employment figures. Job growth was driven by both public and private hiring and a diverse set of industries. The labor force continued to grow, helping to restrain wage growth. Average hourly earnings grew just 0.2% for the second month in a row, bringing the year-over-year pace down to 4.2%, the slowest pace in more than two years and about a percentage point above where it was before the pandemic. Today’s report drove yet another increase in Treasury yields and fanned the flames that the FOMC may hike the federal funds rate one more time at one of its two remaining meetings of the year. Another rate hike before the end of the year is a possibility, but for now our base case remains that the last rate hike of the tightening cycle occurred in July. Next week’s CPI report and the Q3 Employment Cost Index to be released on October 31 will help the FOMC determine if progress is continuing in its inflation fight despite the surprising strength in employment gains in recent months. READ FULL ARTICLE >>