Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A 140k September Nonfarm Payroll increase is anticipated after gains of 187k in August, 157k in July, and 105k in June. Initial claims fell in September after an August bounce, while continuing claims remain tight. We expect the jobless rate to tick down to 3.7% from 3.8% in August, versus a 54-year low for the two-digit rate of 3.39% in April. Hours-worked are assumed to be flat after a 0.4% August rise, while the workweek ticks down to 34.3 from 34.4 in August. Average hourly earnings are assumed to rise 0.4%, after a 0.2% gain in August, while the y/y wage gain should hold at 4.3% for a second month. In the last expansion, we saw a 3.5% peak for y/y wage gains in both February and July of 2019, before the pandemic-boost to an 8.0% peak in April of 2020. The ensuing strength in wage gains has allowed continued robust y/y increases, though the return of low-paid workers to the workforce is likely restraining wage increases.
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