No Major Curve Ball in Payrolls and Unemployment

Friday brought the unemployment and payrolls report for the month of September. The Bureau of Labor Statistics (BLS) reported that the unemployment rate ticked up to 5.0% from a reading of 4.9%. Bloomberg and Dow Jones were forecasting 4.9%, but the gain was due to a rise in workers and a rise in the size of the labor force.

The big report is the nonfarm payrolls, rising by 156,000, and the private sector payrolls rising by 167,000 — meaning that the government lost 11,000 jobs in September. These were not hot or cold and were more or less in line with expectations.

Here is what was expected to be released from major wires on the payrolls reports: Reuters had the consensus estimate at 175,000 for September’s nonfarm payrolls. Dow Jones had a consensus estimate of 172,000, and Bloomberg’s consensus estimate was 168,000 (with an Econoday range of 155,000 to 200,000).

Average hourly earnings rose 0.2% on the monthly reading in September, but year over year this number was up by 2.6%.

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The labor force participation rate ticked up to 62.9% in September after being 62.8% in August.

The average workweek rose to 34.4 hours in September after 34.3 hours in August.

Other key projections available on Thursday were as follows:

• Goldman Sachs raised its estimate on nonfarm payrolls to 190,000 from 175,000.
• Convergex told Dow Jones that about 170,000 jobs is a reasonable estimate in nonfarm payrolls.
• Merrill Lynch called for nonfarm payrolls to rise 140,000 and was looking for private sector payrolls coming in at 135,000.
• Ned Davis Research was calling for nonfarm payrolls to increase about 185,000 in September.
• Stifel Fixed Income was projecting 155,000 in nonfarm payrolls.
• Jefferies was projecting 180,000 in nonfarm payrolls.

As a reminder, initial jobless claims for unemployment insurance were down by 5,000 to 249,000 last week. This was the second lowest level since 1973. Also, the ADP National Employment Report shown earlier this week projected that overall private sector payrolls increased by 154,000 jobs from August to September.

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