US payroll employment growth likely perked up in September

Government statisticians are expected to report that payroll employment growth reaccelerated in September. Fundamental and technical factors support the expectation that hiring gathered steam last month. The average number of persons filing initial claims for unemployment insurance was little changed at 273,000 over the four weeks leading up to the September establishment survey, suggesting that the pace of "pink slipping" remained quite low. Consistent with a pickup in the previously unemployed finding jobs, the number of persons on regular state benefits contracted by 24,000 to a four-month low of 2.24 million during the period ended September 12. 

The diffusion index of job gains across the 278 industries surveyed by the BLS retreated to 61.8% over the three months ended August, yet remained nine percentage points above its long-term average and well above the critical 50- point mark. Warmer-than-normal temperatures across the continental US, combined with unusually arid conditions in the western portion of the country, are expected to provide an added lift to hiring in a variety of industries this month.