Strong wages more important than hurricane depressed jobs data

Markets were left disappointed by last month's wage figure, but as is often the case, much of it can be put down to a change in the number of workdays between months. Where two extra workdays depressed August's data, two fewer days in September should see a stronger reading this time around. Of course, these statistical quirks tell us nothing about the economics. The tight labour market and increasing job-to-job flows should drive up the pace of pay rises over coming months. But it is a slow-moving picture and we may struggle to see growth above 3% this year.

There's little doubt this month's payrolls data will be depressed by the recent hurricanes. But so far, initial jobless claims have spiked less than in the aftermath of Hurricane Sandy in 2012, which in itself only caused a minor blip in payrolls. Back then, the Bureau of Labor Statistics said Sandy "did not substantively impact the national employment estimates". We suspect the 75k consensus may be a touch low, but either way, the Fed will largely ignore this month's data. In any case, they are comfortable with consistently lower jobs growth as the economy closes in (or reaches) full employment.

Last month saw a "good" rise in the unemployment rate away from its post-crisis low, as more people entered the labour market, albeit without immediately finding a job. We expect the rate to stay stable at 4.4% this time, although this data can be pretty choppy between months.