ING: Sept US Payrolls Miss Makes Taper A "Much Closer Call"

ING's read on September's below-expectations headline payroll figure is that it makes a Nov 3 Fed taper announcmenet "a much closer call, but we still narrowly favour it happening. Private payrolls still posted a reasonable increase and with the wage story moving higher and companies struggle to find staff it continues to be a labour supply issue that is holding back jobs rather than demand ... with inflation pressures in the economy continuing to build this argues for a dialling back of the stimulus."

• On the labor supply limitations, ING writes that the lack of the expected "improvement in worker participation come September suggests major rigidities in the labour market".
• They point to several factors: strong household balance sheets reducing the incentive to work (which could dissipate in Nov and Dec amid holiday spending), and early retirement (which may represent a more permanent loss to the labor force).