BNP's Paul Mortimer Lee said the US...>

US DATA REACT: BNP's Paul Mortimer Lee said the US September jobless rate "fell

sharply to 4.2% from 4.4% in August (with the BLS saying the storms had no

discernible effect on this), while the participation rate rose from 62.9% to

63.1%. The Household survey showed a massive 906k jobs created in September. It

is difficult to believe the survey was not affected by the weather, but that is

the statisticians' claim. The employment rate for those in the prime working-age

group (25-34) also rose, from 81.6% to 81.8%, but remains about 1.5 pp below the

pre-recession peak. This gap suggests that there might be more spare capacity in

the labor market than the unemployment rate alone would suggest."

- He adds "this might help to explain why wage growth has largely remained

modest" but "September saw a sharp jump of 0.5% in average hourly earnings. With

lower-paid workers more likely than higher paid to be laid off due to the

storms, this may be distorted; average wkly hours remained unchanged. The rise

took the y/y to 2.9%, equalling the peak last December and well above the 2.5%

the consensus expected."