A report released today by the Bureau of Labor Statistics showed that the United States in September seasonally adjusted non-farm payrolls increased by 336,000, the largest increase since January 2023, 170,000 expected, compared with 187,000 previously. Us unemployment rate 3.8% in September, 3.70% expected, 3.80% previously.
The strong increase in nonfarm payrolls was due to seasonal adjustment issues related to the return of educators after the summer break. In addition, the U.S. auto workers strike had no effect on payrolls because it began at the end of the government's survey of businesses for the September jobs report.
Us unemployment rate in September (left) and non-farm payrolls increase (right)
Wage gains have moderated and are likely to slow as fewer people quit their jobs in search of better ones. Labor market strength is helping support the economy, which is expected to grow at a 4.9% annual rate in the third quarter.
U.S. average weekly hours in September 34.4, expected 34.4, previous 34.4; Average hourly earnings 4.2% year-over-year, 4.3% expected, 4.3% previous; 0.2% quarter-on-quarter, 0.3% expected and 0.2% last.
Food service industries and drinking establishments added 61,000 jobs in September, returning the number to February 2020 levels for the first time since the pandemic triggered mass layoffs more than three years ago. Elsewhere in the hospitality sector, accommodation employment increased by 16,000 in September, but remains about 10 per cent, or 217,000, below February 2020 levels.
Market reaction:
Us stock futures short-term diving, Nasdaq (13219.8341, -16.18, -0.12%)100 index futures fell more than 1%;
The dollar index rose about 30 points to 106.61 in the short term.
Treasury yields moved higher in the short term, with the 10-year yield now at 4.799%; The yield on the 30-year Treasury bond rose to 5.04 percent, its highest level since 2007.
Traders on Friday increased bets that the Federal Reserve will raise interest rates before the end of the year. The rise in implied yields on contracts tied to the Fed's policy rate suggests a close to 50 per cent chance that the Fed will raise its benchmark rate to a range of 5.50 per cent to 5.75 per cent at its December meeting. Before the jobs report, traders saw about a 34 percent chance of a 25 basis point rate hike.
Industry opinion:
Richard Flynn, UK managing director at Charles Schwab, said investors will interpret today's jobs report as a sign that demand in the labor market remains healthy. Job growth has been a key driver of the economy's resilience, balancing weakness in areas such as housing and consumer goods. The strong data released today should help dispel fears of a recession and bring optimism to sectors of the economy that may be moving toward stability.
Strategist Erica Adelberg said the strong nonfarm data could be a challenge for both residential mortgage-backed securities and the housing market, as it suggests volatility and interest rates could continue to rise. Still, any initial reading of MBS's performance is ambiguous.
Seema Shah, chief global strategist at Principal Asset Management, said the surge in non-farm payrolls may not be good news for markets. Not only do they suggest the economy is overheating and the Fed will need to respond with more rate hikes, but they also reinforce the "Fed will keep rates higher for longer" narrative that has been haunting the bond market for the past few weeks. Markets are hoping for a perfect landing, but they're dealing with an upward-sloping economy. Shah noted that the slight slowdown in wage growth simply could not offset the much higher-than-expected increase in payrolls and upward revisions to previous months 'data.