MNI US Employment Insight - Sep'23: Wage Dynamics Counter Biggest Beat Since January

Executive Summary: A reaction of two legs as dovish wage dynamics counter signs of near-term strength

• Nonfarm payrolls topped expectations comfortably, providing the biggest beat on expectations since January. NFP growth was complimented by positive net revisions, with the fading impact of the actors strike and the Yellow Corp bankruptcy providing supportive factors.
• Average hourly earnings, however, were softer than expected for a second month, and a static unemployment rate added to the dovish theme. These releases drove the second leg of the market reaction, with November FOMC rate hike pricing still suggesting further tightening is an outside chance.
• No sell-side analysts that we reviewed changed their calls for upcoming Fed meetings, with the majority not expecting a hike in either November or December. They point to softer AHE growth as rationale for their calls, but note upside risks to their forecast and stress the importance of the September CPI print.

USEmploymentReportSep2023.pdf