US non-farm payrolls rose by 136,000 in September

US non-farm payrolls rose more or less as expected last month while the unemployment rate fell to its lowest level in half a century.

According to the Department of Labor, hiring increased by 136,000 in September and non-farm payroll gains for the prior two months were revised higher by a combined 45,000.

Economists had forecast a reading of 140,000 for September.

And the length of the average work week was unchanged at 34.4 hours; however, average hourly earnings were unchanged versus August, which was substantially worse than the 0.2% gain that had been anticipated.

Versus a year ago, wage growth slipped from a year-on-year pace of 3.2% during the previous survey month to 2.9% (consensus: 3.2%).

In parallel, the rate of unemployment dropped from 3.7% for August to 3.5% in September (consensus: 3.7%).

The labour force participation rate was steady at 63.2%.

The lion's share of hiring came from services (+109,000), with non-farm payrolls in manufacturing up by 5,000, while Retailing continued to haemorrhage jobs (-11,400).

In an initial reaction, the yield on the interest rate sensitive benchmark two-year US Treasury note was three basis points higher at 1.42%.

Commenting on the unexpected drop in unemployment, Ian Shepherdson at Pantheon Macroeconomics believed it was just catching up with increases in non-farm payrolls, as the two results are derived from separate surveys whose results sometimes deviate from each other.

As for the non-farm payrolls numbers, Shepherdson added: "This is as good as it’s likely to get until the trade war is resolved. Leading indicators, which warned clearly of the slowdown in job growth over the past few months, now point clearly to the trend slowing to just 50K or so by the end of the year."

Nonetheless, he expected increases in average hourly earnings to resume starting from the next month as all leading indicators continued to point to a sustained uptrend (and upwards revisions to the September figures were "a good bet too").

"We are inclined to think the Fed won’t ease later this month on the back of these data, but Chair Powell could change that in his speech at 2pm eastern time."

"The 136,000 increase in non-farm payrolls in September illustrates that while growth in employment (and broader activity) has slowed, it is not collapsing," chipped-in Paul Ashworth at Capital Economics.

"There is nothing here to suggest the Fed needs to cut interest rates again at this month’s FOMC meeting rather than waiting until December. But the Fed has shown itself to be unwilling to fight the markets (or the President) this year, so we’ll take our lead from Chair Jerome Powell’s comments over the next week."