NEW YORK The U.S. unemployment rate dropped to a near four-year low of 7.8 percent in September, a potential boost to President Barack Obama's re-election bid.
JOHN KILDUFF, PARTNER, AGAIN CAPITAL LLC, NEW YORK
"The employment report will lend further support to the equity markets and oil.
"The decline in the rate, below 8 percent, will go a long way to boost consumer confidence.
"The household survey was particularly strong, and the 114,000 jobs created are another positive. The data still leaves the Fed plenty of cover to engage in their latest round of bond buying, and that should support market prices further.
"The ultimate confirmation of this renewed employment trend will be an increase in gasoline and diesel fuel demand, which has yet to occur. But, overall, a floor under the markets has now been installed."
RON FLORANCE, MANAGING DIRECTOR OF INVESTMENT STRATEGY FOR WELLS FARGO PRIVATE BANK BASED IN SCOTTSDALE, ARIZONA
"It's a little confusing, to be honest with you. The number of jobs created wasn't that high but the unemployment rate came down and the participation rate went up a little bit, so it's confusing. All in all, it doesn't change the trajectory of what the jobs environment has been really for the last year. We continue to increase jobs but not at a rate that is fast enough to significantly change the unemployment picture for American workers.
"July and August - both revisions were meaningfully higher. At this point in the market, it's almost a sigh of relief and the market is looking at it and if it's not bad news, they trade up. That is just the mood in the equity markets right now, the bias is towards the upside, and the number wasn't bad. It didn't show that there is deterioration, it shows that there is continued improvement. Slow - unacceptably slow - but continued improvement. For the rest of the day people will try to figure out the arithmetic of how the participation rate went up and the number of jobs that went up wasn't that much and the unemployment rate dropped significantly."
OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE
"The headline of the day is clearly the drop in the unemployment rate, which was a big surprise. There is something in these numbers for everyone. The rise in the participation rate shows somewhat of a real improvement in the labor market."
"The unemployment rate is lower than when Obama took office while Romney will likely say the pace is still lackluster. Conspiracy theorists will go wild on these numbers. Overall, it is a decent report, but nothing to write home about. It does not shed much light on the real state of the economy. The currency market reaction is mostly in dollar/yen, with the dollar gaining on this report. It should be a risk-on day."
LANE NEWMAN, DIRECTOR OF FOREIGN EXCHANGE TRADING, ING CAPITAL MARKETS, NEW YORK
"To be honest with you, I think it's a pretty good number. It's a surprise. That said, the jobless rate coming down to 7.8 percent has a lot to do with labor force participation. But overall, it's being taken as a strong number. That's the way the bond market is reacting. The market appears to want to buy dollars given this number and I don't see this as bearish for equities."
PETER JANKOVSKIS, CO-CHIEF INVESTMENT OFFICER , OAKBROOK INVESTMENTS, LISLE, ILLINOIS
"I'm shocked by the drop in the unemployment rate. I'm not really sure what to make of it.
"The revision to last month and falling in line (for September) suggests there probably is some justification for futures moving higher."
ROBERT BLAKE, SENIOR CURRENCY STRATEGIST, STATE STREET GLOBAL MARKETS, BOSTON
"We think it's a very strong report. The initial headline is bang on expectations but there is an 86,000 net revision upwards to past months and there was a huge gain in household employment. That pushed the unemployment rate down to 7.8 percent. It is good for risk but not good for the (U.S.) dollar and it will favor other North American currencies, such as Canada and Mexico. We still have European issues to deal with so we like selectively buying riskier currencies. We also had a very good number in Canada at the same time which is supportive of the same theme."
SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK:
"There is a lot of stuff going on in this report. The headline doesn't look very inspiring but there was a big upward revision to the previous month that is mainly effecting the government sector. The underlying private payrolls growth is unimpressive, lower than expected in September and soft beforehand. Oppositely there was a big decline in the unemployment rate with a pretty healthy breakdown there with employment and the labor force higher.
"Generally we are still seeing a mixed underlying picture that is neither too impressive nor terrible."
ROBBERT VAN BATENBURG, HEAD OF GLOBAL RESEARCH, LOUIS CAPITAL MARKETS, NEW YORK
"The household employment jumped up strongly. That's an important move. These are not government jobs. It's an impressive number."
"This is a strong report any way you slice it. In the financial markets, some people will question the validity of this number so close to the Presidential election.
"This doesn't completely disavow the listless labor picture. It's still a significant improvement month-over-month.
"The media has mulled over the President's lackluster debate performance. I think this will push that to the side now. They are going to talk about this robust jobs report. This will help the President's re-election chances. The Republicans will try to shoot holes in it. But optically it will be hard to do that. We will have another job report before the election. Still this is going to going to shape the narrative for the rest of the month."
DAVID MANN, SENIOR CURRENCY STRATEGIST, STANDARD CHARTERED, NEW YORK
"After the upward headline revisions, the payroll numbers are not as weak as people might think. Also, there's a lower jobless rate."
STOCKS: U.S. stock index futures rose.
BONDS: U.S. Treasury debt prices tumbled.
FOREX: The dollar gained versus the yen and euro.
(Americas Economics and Markets Desk; +1-646 223-6300)