US labor market likely tightened further in September

The Bureau of Labor Statistics' (BLS) report on the employment situation in September will provide a final update on hiring activity as policymakers prepare for the October 27-28 Federal Open Market Committee (FOMC) meeting. Analysis suggests that the latest soundings on job creation and unemployment will reveal "some further improvement in the labor market" that, assuming international developments move in a positive direction, would be consistent with a liftoff in administered rates at the FOMC's December gathering.

Government statisticians are expected to report that nonfarm payrolls expanded by 225,000 in September and to mark significantly higher the preliminary 173,000-job gain posted in August. Fueled by a solid pickup in household employment during the reference period, the civilian jobless rate likely moved one tick lower to 5.0% - the lowest level since April 2008. Reflecting the early termination of the establishment survey period, average hourly earnings likely edged a below-consensus 0.1% higher in September.

"We expect the average workweek of all private employees to return to the 34.5-hour span prevailing from March through July", says Societe Generale.