As expected, nonfarm payrolls rebounded from hurricane-related effects. The unemployment rate edged lower, but that may have been noise. Leisure and hospitality was the sector most affected by Hurricane Irma, which might explain the choppiness in average hourly earnings (up 0.5% in September, flat in October). Looking through the noise, the job market data are consistent with a further increase in short-term interest rates, most likely at the December policy meeting.

Scott Brown
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Prior to seasonal adjustment, nonfarm payrolls rose by 1.042 million in October, vs. 885,000 a year ago. Leisure and hospitality fell by 126,000 (vs. 219,000 in October 2016). This supports the view that Hurricane Irma pulled forward some of the seasonal job losses (mostly in restaurants) into September. Seasonally adjusted, private-sector payrolls averaged a 150,000 gain over the last three months (vs. 171,000 in the first seven months of 2017 and a +170,000 average for all of 2016). Payroll growth ought to slow as the job market tightens.

Scott Brown
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