NFP Report to Keep Fed on Rate Hike Path

Friday’s nonfarm payrolls report for September comes at an important time for markets: As inflation fears again pop up, the government’s measures of not only job creation but also wage growth could provide important signposts for what’s ahead.

Economists surveyed by Refinitiv figure that payrolls grew by 185,000 for the month and the unemployment rate ticked down one-tenth of a percentage point to 3.8 percent. The job gain would be a little below the average increase of 207,000 so far in 2018, but likely enough to convince Wall Street that the employment climate remains strong.

What the market will be watching more closely, though, will be the increase in average hourly earnings.

August showed a 2.9 percent gain, the biggest year-over-year rise since the recovery began in 2009. If the September number eclipses that, it could add to a belief that inflation is brewing and helping to stoke higher wage pressures. Current expectations for a 0.3 percent month gain would equate into 2.8 percent year-over-year growth.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza