The following is Barclays Capital's reaction to today's NFP report.
"Nonfarm payroll growth for September came in well below our expectations at 142k. Heading into the report, we (forecast: 200k) and consensus (201k) had been looking for payroll gains in line with recent trends. Private payroll growth was even softer than the headline number would imply, increasing only 118k in September following a tepid rise of 100k in August. Prior months’ payroll data were also revised substantially lower (59k).
Beyond the headline number, we see broad-based weakness in US labor markets, with the past month’s revisions now showing a decidedly softer trend growth in jobs.
Past experience suggests that these episodes temporarily weigh on demand for labor and we raised this as a risk to our outlook on August 24 when we pushed out our expectation for the first rate hike to March 2016. Our past research on the subject suggests it takes more than just a few months for these pot holes in global growth and uncertainty to fade.
In the meantime, US activity, payroll growth, and inflation tend to soften. As such, we retain our view that rate hikes will be deferred past year end and we believe this employment report substantially reduces the probability of a rate hike from the FOMC this year,"Barclays says.
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