On the September Jobs Report
A big payroll miss versus an already low consensus, on top of downward revisions. There is nothing here that suggests any risk to the economy. This report is doubly scrambled – not only by the actual effects of hurricanes on Texas and Florida, but by the difficulty of collecting accurate data from affected counties. Other contemporaneous indicators of the labor market pointed to net gains of 150,000. The large reported gain in average hourly earnings is mostly the result of the large drop in leisure payrolls – which swamped gains in every other sector. This large sector is the one with the lowest average wages, so losses here raise the overall average. The FOMC has already said it would ignore noisy data arising from the hurricanes, so none of this changes the outlook for a likely rate hike in December.