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According to National Bank of Canada’s analyst Krishen Rangasamy, September’s employment reports were largely positive, and consistent with a still-expanding US economy.  

Key Quotes:

“Those concerned about an imminent U.S. recession should be reassured by September’s employment reports. The household survey had another massive month ─ almost a million net new jobs have been created in just the last two months ─, causing the jobless rate to fall to 3.5%, the lowest in 50 years.”

“The more closely watched establishment survey was also better than expected (after considering upward revisions to prior months) showing a 136K increase for non-farm payrolls in September, which is more than enough to absorb new entrants in the labour market.”

“While there were job cuts in manufacturing in September, that can’t be surprising amid well-documented factory woes. One blemish from the establishment survey, however, was the decline in wage inflation to the lowest since July last year.”

“Year-on-year growth in hourly earnings indeed fell to just 2.9%, something FOMC doves could emphasize to justify another interest rate cut before year end.”