U.S. September Employment Report: Back to the Sixties

Key points: U . S . job gains decelerated more than anticipated in September (134K versus 185K expected) but with strong upward revisions for the past months. Meanwhile, the unemployment rate d eclined by two tenths to 3.7%, th e lowest level since the late 60s. Wages rose in line with expectations, with the yearly growth rate of average hourly earnings easing to 2. 8%. In short, the near term trend in job gains remains solid at around 200K with no acceleration in wages. Yet, further decline in the unemployment rate may lead Fed members to become more hawkish next year.