Payrolls Review: US Elections stay in focus

<p>October’s U.S. Employment Situation report was, for once, not the foremost concern for traders on the first Friday of the month, given its proximity to increasingly too-close-to-call presidential elections.</p>

October’s U.S. Employment Situation report was, for once, not the foremost concern for traders on the first Friday of the month, given its proximity to increasingly too-close-to-call presidential elections.

 

Perhaps the most remarkable point about the figures were their drizzle of minor revisions compared to the September release, the most notable being the headline payrolls upgrade by 35,000 to 191,000.

Splitting the difference, albeit not a particularly scientific practice, is certainly a short-cut methodology often applied by traders.

Doing so left the two-month total still somewhat short of previous forecasts—only 161,000 jobs were added last month against about 175,000 widely expected.

But taking into account the revised payrolls tally from the month before, the magnitude of the headline miss in October does not seem large enough to weaken expectations of a Federal reserve hike in December.

Average hourly earnings growth inching forward by a tenth of a percentage point to 0.4% also helped downplay the notion that slack might be creeping back into the U.S. labour market, particularly as the jobless rate retreated back to 4.9% from 5% seen in September.

A positive reading of the data, defrayed by worries about 8th November was arguably reflected in cross-asset market reactions soon after the data were released.

U.S. stock index futures remained largely flat, Treasurys trimmed slight gains, and the dollar index stayed little-changed along the ‘flat line’, whilst the greenback against the yen retained the moderate bid seen since Asian trading hours.

 

Most market attention lay elsewhere.

 

 

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