This morning’s release of the September Non-Farm Payrolls (NFP) report came in considerably weaker than expected at a level of 134K vs estimates for a gain of 181K. This weaker reading was especially surprising given the fact that most secondary indicators of employment for the month were positive. In this case, though, it must have all come down to seasonality. As we highlighted in yesterday’s preview report, “Seasonality is one factor not working in favor of a strong report tomorrow. Along with March, no other month has seen a weaker than expected initial release of the NFP more often than September.”
As shown in the table below, with today’s NFP report coming in weaker than expected again, September is now in the lead all by itself in terms of the greatest frequency of weaker than expected reports. In September reports over the last ten years, the initial release has only exceeded forecasts twice.