NBC Economics and Strategy highlights that U.S. nonfarm payrolls rose just 29K in September versus a 90K consensus, while the household survey showed a 406K employment surge and a 4.2% unemployment rate. Q2 real GDP was revised up to 2.2% annualized. The headline PCE deflator stayed at 3.4% and core at 3.0%, both below expectations due partly to methodology changes.

Soft payrolls and benign PCE

“In the U.S., nonfarm payrolls rose 29K in September, a weaker print than the one anticipated by economists polled by Bloomberg (+90K).”

“Released at the same time, the household survey painted a more upbeat picture of the situation prevailing in the labour market, as it showed employment surging 406K in September.”

“Despite the increase in employment in September, the unemployment rate rose by one tenth of a percentage point to 4.2%.”

“Still in the U.S., data released this week by the Bureau of Economic Analysis showed an upward revision to Q2 real GDP growth in the third estimate, from 1.5% to 2.2% on an annualized basis, a print higher than the consensus, which had predicted no revision.”

“The headline PCE deflator in the U.S. printed at 3.4% in August, unchanged from the prior month and significantly below consensus expectations (3.7%). The 12-month core measure also stayed unchanged, at 3.0%. Once again, this result was three-tenths lower than economists’ expectations. It should be noted that part of the negative surprise in the inflation data was due to a change in methodology.”