The U.S. economy has now added over 1.5 million jobs in 2016.
Today's report was increasingly important as it was the last before November's Federal Reserve meeting where policy makers are grappling with increasing interest rates. Despite being slightly below consensus, the report was strong enough to keep a rate hike in 2016 on the table. Markets currently see the first hike coming in December 2016, which, according to the CME FedWatch tool is at 65%. The probability of a November hike remains just below 10%.
September's nonfarm payrolls report showed the economy added 156,000 jobs in the month of September, slightly below market consensus according to the Bureau of Labor Statistics. The unemployment rate ticked higher to 5% from 4.9%. The July report was revised down from 275,000 to 252,000, and the August report was revised up from 151,000 to 167,000. (See also: The Most Interesting Phenomenon in Today’s Jobs Market.)
Strong growth was seen in the business and professional sector which added 67,000 jobs and the health care sector which added 33,000 jobs. The flailing mining sector saw some reprieve with employment remaining steady, something it hasn't done for a while. Construction, manufacturing and government services remained flat for the month.
Average hourly earnings for all employees rose 6 cents to $25.79 and over the year have risen 2.6%. The average work week for September rose 0.1 hours to 34.4 hours.
Markets are relatively unchanged after the report. At 9am EST equity futures are flat, the U.S. 10-year treasury yield is up 2 basis points to 1.75% and the U.S. dollar index remains slightly higher on the day.