At the end of the week we will receive a much-anticipated employment report for September, where the private sector is expected to add a modest 65,000 net new jobs. This is slow progress to say the least, and further roll-offs of temporary Census workers will cause the headline number to decline slightly. All told, we are looking for a small uptick in the unemployment rate, to 9.7%.

KEY U.S. DATA RELEASES THIS WEEK

Tuesday, October 5 – ISM Non-Manufacturing Index (Sep.)

• IHS Global Insight: 53.3
• Consensus: 52.0
• Last Actual: 51.5 (Aug.)

What to Look For

• Slight upward bounce in the index.

Implications

The September ISM index for services industries is expected to see a slight bounce to 53.3, from 51.5 in August. We expect the activity index to rebound modestly, as freight volumes have picked up in the past few weeks from a summer lull. The employment index should also rise, to almost 50.0. Overall, a modest improvement in September, but nothing to get excited about.

Friday, October 8 – Employment Report (Sep.)

Nonfarm Payrolls

• IHS Global Insight: -5,000
• Consensus: 0
• Last Actual: -54,000 (Aug.)

Unemployment Rate

• IHS Global Insight: 9.7%
• Consensus: 9.7%
• Last Actual: 9.6% (Aug.)

Average Hourly Earnings (All Employees)

• IHS Global Insight: 0.1%
• Consensus: 0.2%
• Last Actual: 0.3% (Aug.)

What to Look For

• Private employment to rise by 65,000.
• Overall employment to decline by 5,000 due to further reductions in Census workers.

Implications

We expect private employment to rise 65,000 in September, very similar to the 67,000 increase in August. The labor market evidence continues to point to job creation, but at a slow pace. We expect headline employment to fall 5,000, though, as more than 70,000 temporary Census workers were released in September. This is the last time that Census layoffs will distort headline employment, because only 6,000 temporary Census workers remained in place as of mid-September. The unemployment rate should move up another notch, from 9.6% to 9.7%.