Analysts react to US jobs report: Unicredit still sees December rate hike

"Especially sobering about this report is just when the Fed had been increasingly shifting attention towards slowing inflation metrics under the assumption that labour market metrics will continue improving, this happens. The door to Fed lift-off has been shut beyond Q1 2016 as the extended weakness in the world's biggest buyer of commodities, combined with the erosion of the “Gulf Nations' Put” as well as the decline in EM FX reserves is a defacto tightening of equity and bond markets." - Ashraf Laidi, Independent strategist

"While it’s always important not to over-react to one single data release, we’ll make an exception in this case. The chances of a rate hike by the Fed this year just went way down. We wouldn’t be surprised if the economy had a stronger fourth quarter. But that isn’t going to show up in the published data for another few months, which means the Fed won’t be raising rates until early 2016." - Paul Ashworth, Capital Economics

"Our previous call was a 60% chance of a December hike, with a threshold of 150k for payrolls being our key metric. The September payrolls (including revisions) take us below a 50% chance of a hike this year. When to move the hike to is dependent on whether this is a soft patch or something worse. Given good household real income growth and rates at zero our assessment is this is a soft patch, though clearly the tightening in financial and monetary conditions and external demand weakness is a factor. We expect the economy to continue to grow above trend." - US Economics team, BNP Paribas

"We believe the weakness in payroll employment growth and hours worked reflect the deceleration in activity abroad and, more recently, the pickup in financial market volatility domestically. 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." - Michael Gapen, Rob Martin, Jesse Hurwitz, Barclays

"Today’s employment report has most likely removed even the last small chance for a rate hike as early as this month (October 28). But we continue to expect the first move at the mid-December meeting. Various FOMC members have over the past couple of weeks verbally teed up for a rate hike this year." - Dr.Harm Bandholz, Unicredit Research