NFP Quick Analysis: Four positive points that drive up the dollar and keep hawks happy

  • The US economy gained more jobs than some had feared. 
  • Upward revisions added a hefty 45,000 jobs in previous months.
  • Census hiring was a meager 1,000 jobs – with robust private-sector hiring.
  • The underemployment level significantly dropped, a positive for the Fed.

September's Non-Farm Payrolls report is a ray of sunshine after a week packed with doom and gloom. A quick look at the headline number in comparison to the consensus reveals a miss – 136,000 against 145,000 expected. But that is far from telling the full story.

Four positive factors

1) Above the whisper number: An increase of 136K beats 125K which was Bloomberg's whisper number. The lower expectations came after multi-year lows in ISM's Purchasing Managers' Indexes. 

2) Upward revisions: After several months of jobs reports that included downward revisions to previous figures, the September report includes upward revisions worth 45,000. Some will add this figure to September's gain and will see an increase of 181K.

3) Census hiring: Back in August, the job gains included significant hiring for the 2020 national census – hiring that is temporary by nature. Some had feared that September's publication would be bloated by additional hiring toward the once-in-a-decade event. These fears faded when the report showed only 1,000 positions gained for the project.

4) "Real unemployment" drops: The U-6 underemployment level, which takes into account people who work part-time and seek a full-time report, has surprised with a drop to 6.9% against 7.2% expected. The figure is a broader representation of the amount of slack in the job market – and is watched closely by the Fed.

Fed hawks, the dollar, and wages

These four figures may make please hawks at the Federal Reserve. Some voted against cutting rates and may oppose another reduction later in October. The odds of a rate cut are dropping and the dollar may extend its gains

It is essential to note that there was a significant disappointment in the jobs report. Average Hourly Earnings remained flat in September, well below 0.3% expected. Moreover, annual wage growth slipped to 2.9% – not only below expectations but also beneath the round 3% mark.

Nevertheless, the Fed may see it as a one-off event and not necessarily as a change of trend. Also, recent inflation numbers have been upbeat, so this stagnation in wages may be insufficient to push inflation lower.


According to the economic calendar, US Non-Farm Payrolls carried expectations for an increase of 145,000 jobs in September, up from 130,000 in August but below long-running averages.

However, after a series of disappointing data points, real expectations were probably lower. Bloomberg's "whisper number" stood at 125,000. An increase of 100,000 or more jobs is considered sufficient to keep the unemployment rate from rising. 

Average Hourly Earnings were projected to rise by 0.3% monthly and 3.2% yearly. 

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