Hourly Earnings Surge as Payrolls Drop 33,000 vs +100,000 Expected

U.S. nonfarm payrolls fell 33,000 in September versus the 100,000 increase expected, with August revised to 169,000 from 156,000 previously but July lowered to 138,000 from 189,000. That left the 3-month average at 91,000. The unemployment rate dropped to 4.2% from 4.4% (consensus: 4.4%). Hourly earnings surged 0.5% versus the 0.3% expected, from August’s 0.2% gain (revised higher from 0.1%). Hours worked were steady at 34.4.

The labor force jumped 575,000 after the prior 77,000 gain, while household employment was sky high at 906,000 versus -74,000 in August. The labor force participation rate jumped to 63.1% from 62.9%.

As for other job details, private sector employment declined 40,000 (versus a 135,000 increase as read by ADP). The goods producing sector added 9,000, with construction up 8,000 while manufacturing dipped 1,000.

The jobs in the private services providing sector slid 49,000 thanks to a 111,000 plunge in the leisure/hospitality component. The government added 7,000 jobs, but Federal employment was flat. There were 1.47 million people unable to work during September due to weather, the largest since January 1996. The jump in wages and the drop in the unemployment rate is seen almost guaranteeing a Fed hike in December.