Fed officials signal an October pause

Payroll gains slowed to 29k in September, with negative revisions to prior months. Hiring in the service sector weakened, while cyclical sectors remained resilient. The unemployment rate edged higher, but household survey details showed few signs of labor market stress. Annual revisions lowered core PCE inflation more than expected, largely due to portfolio management and investment advice prices. The revised profile demonstrates clearer improvement in both inflation momentum and breadth. Fed Vice Chair Jefferson and NY Fed President Williams pushed back against an October hike, emphasizing patience and the need to assess additional data before tightening further. Overall, downward revisions to PCE, and dovish Fedspeak reinforces our expectation of no October rate hike.