October 2017 US non-farm payrolls and employment report 03 November 2017

  • Prior -33k. Revised to +18k
  • Average hourly earnings 0.0% vs 0.2% exp m/m. Prior 0.5%
  • 2.4% vs 2.7% exp y/y. Prior 2.9%. Revised to 2.8%
  • Average workweek hours 34.4 vs 34.4 exp. Prior 34.4
  • Unemployment rate 4.1% vs 4.2% exp
  • Participation rate 62.7% vs 63.1 exp. Prior 63.1%
  • U6 underemployment 7.9% vs 8.3% prior
  • Private payrolls 252k vs 303k exp. Prior -40k. Revised to +15k
  • Manufacturing payrolls 24k vs 15k exp. Prior -1k. Revised to +6k
  • Government payrolls 9k vs 7k prior. Revised to 3k

Much worse than expected and it’s hit USDJPY down to 113.62. The saving grace is the upward revisions put payrolls inot a positive and the unemplyment rate falling (though that comes along with the drop in the participation rate).

The best idea would be to take both Sep and Oct reports as one, as we don’t know how much weather skew is in here. Wages were said to be up on over-time weather clean up, so they might have washed out now.Take an average and we have 2.45%(need to check my maths in future) 2.6% vs 2.7% in Aug. That’s not that bad, a minor miss.. Take the headline payrolls 261k and the revised 15k and we average 138k. Soft but not disastrous.

For me there’s nothing here to tip the Fed out of a hike, or to bring big fears of them pulling back.

Ryan Littlestone

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