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Last Friday’s U.S. non-farm payroll report showed that the U.S. economy generated 142,000 new jobs in September, well below the 201,000 new jobs that the consensus was expecting.
This should give the data-dependent U.S. Federal Reserve all the cover that it needs to avoid raising its policy rate in October, or perhaps at all in 2015.
Here are the highlights from the latest U.S. employment data:
- The 142,000 new jobs that were created in September fell well short of expectations and the initial non-farm payroll estimates for July and August were also revised downwards by 59,000 jobs. While there are always revisions to initial estimates, six of the past eight reports have now been revised downwards, revealing a pattern of consistently slowing employment momentum.
- The average workweek also shrank from 34.6 hours to 34.5 hours in September. While this may seem like a small change, economist David Rosenberg estimates that this drop in average hours worked is economically equivalent to 348,000 lost jobs.
- Average wages were flat for the month and average year-over-year wage growth held steady at a tepid 2.2%.
- The U.S. unemployment rate was unchanged at 5.1% but only because 350,000 Americans gave up looking for work and are no longer counted as part of the labour force (the U.S. participation rate, which measure this, fell from 62.6% to 62.4% in September.)