NFPs: market pricing for Dec hike sits at around 64% - ANZ

Analysts at ANZ explained that September headline payrolls were slightly weaker than expected (headline +156k) and August was revised up (167k).

Key Quotes:

"The market was looking for 174k. The undershoot vs expectations really came from weakness in government (-11k) and manufacturing jobs (-13k). The rise in September private payrolls was 167k up from 144k in August and in line with expectations.

Market pricing for a hike by December sits at around 64%.

Average earnings rose to 2.6% y/y, indicating wage pressures are gradually moving higher. Unemployment edged higher to 5.0%, but that is because the participation rate rose (62.9% vs 62.8%). The manufacturing work-week rose 0.1 hours to 40.7, which is encouraging of a firmer manufacturing outlook at the margin. During the first nine months of this year job gains have averaged 178k compared to 229k in the same period last year. The trend growth in the labour market is slowing, but that's because available slack is less and the expansion is mature. The FOMC has acknowledged that in its recent statement and dot points."