Huatai Sees December Fed Hike as Base Case After Weak Jobs Report

Huatai Securities sees the weaker-than-expected September nonfarm payroll report reducing the urgency for consecutive rate hikes in the short term, while another increase in December remains its base case.

The three-month average of new nonfarm payrolls was 51,000, near the level associated with balanced employment. The unemployment rate also remained relatively low, suggesting the labor market was steady but not especially tight.

Slower wage growth alongside weaker September hiring points to slower real-income growth that month. Household consumption may not sustain August’s strong performance.

The NFIB hiring-intentions indicator suggests October nonfarm payrolls may remain weak, with payrolls potentially rebounding afterward.