US job growth slows slightly in September

US job growth slowed to a pace of 156,000 in September, according to the US Department of Labor.

Economists had penciled in a rise of 176,000.

Nonetheless, the previous month´s tally was revised slightly higher to show a gain of 167,000, versus an initial estimate of a 151,000 person rise.

The unemployment rate did increase by one tenth of a percentage point versus July to 5.0% (consensus: 4.9%). However, the labour force participation rate increased from 62.8% to 62.9%.

Average hourly earnings increased at a 0.2% month-on-month clip.

By sectors, job growth in services slowed from the 169,000 person pace observed in August to 157,000, while factory jobs increased by 10,000 versus a 25,000 person decline in the month before.

Public sector employment growth also slowed, with 11,000 jobs lost after 23,000 were created in the prior month.

In an immediate reaction, in remarks to CNBC, Minneapolis Fed president Loretta Mester - a well-known policy hawk - described the jobs report as "solid".

"It is not clear to us that the labor market momentum evident in this report is fully consistent with a December rate hike, given Chair Yellen’s views on the recent trend in participation and the recent slowing trend in headline employment growth. Nonetheless, most members will likely take comfort from the underlying details of the report along with the relative strength in wage growth. The FOMC will receive two more reports before the December meeting," Barclays Research said following the release of Friday´s data.

"The combination of solid employment gains, strong enough to put further downward pressure on the labor market, and growing signs for rising wage pressure, is enough to leave the Fed on track for a December rate hike. This holds even more true as the most recent communication has suggested that the Committee set a pretty low bar for moving before the end of the year.

"And the latest data, not only for the labor market but the broader economy (ISMs, consumer confidence and even durable goods orders) were by far strong enough to clear that bar. We, therefore, continue to expect a 25bp hike in December, followed by a couple of more hikes in 2017," said Dr.Harm Bandholz, chief US economist at UniCredit Research.