US non-farm payrolls surge in September

According to the Department of Labor, non-farm payrolls surged by 336,000 last month.

Economists had penciled in a gain of 170,000.

That was on top of upwards revisions to the figures for the previous two months by a combined 119,000.

Average hourly earnings however increased by 0.2% month-on-month, missing the consensus by one tenth of a percentage point.

Private sector growth accounted for the bulk of the beat last month, rising by 263,000 (consensus: 160,000), whilst the public sector generated 73,000 jobs.

The unemployment rate, which is derived from the separate Household survey, was unchanged versus the prior month at 3.8% (consensus: 3.7%).

Labour force participation, which is also derived from the Household survey, was steady at 62.8%.

In response, as of 1431 BST the yield on the benchmark 10-year U.S. Treasury note was climbing 13 basis points to 4.837%.

Looking ahead, Ian Shepherdson, chief economist at Pantheon Macroeconomics, noted how the National Federation of Independent Businesses' hiring intentions index continued to point towards private sector payrolls growth of 175-200,000 over the next few months.

The economist also noted that all of the net revisions to the July and August numbers were in the state and local education numbers, in part due to the seasonal adjustment factors, and said those seasonal anomalies were now corrected and would not repeat.

Shepherdson added: "the NFIB points to a continued 175-to-200K private payrolls over the next few months. That’s still pretty strong, but the labor force has expanded by an average of 276K over the past year - mostly thanks to faster population growth - and if that continues, the unemployment rate will trend gradually upwards.

"That in turn will depress the quits rate - which already is back to its pre-Covid level - and wage growth will slow further, easing the pressure on inflation, especially core services."

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