October 6 news (editor Ma LAN) The U.S. Department of Labor released September non-farm employment changes and unemployment rate data. U.S. nonfarm payrolls rose 336,000 in September, a sharp rise from expectations of 170,000 and up from 187,000 in August.
The unemployment rate was unchanged from 3.8 percent in August and slightly higher than expectations of 3.7 percent. Hourly earnings rose 0.2 percent month-on-month, unchanged from August. Hourly earnings rose 4.2 per cent year-on-year, down from 4.3 per cent in August. The labor force participation rate was unchanged at 62.8 percent, and the average work week was 34.4 hours, also unchanged from the previous month.
This latest data undoubtedly shows the strength of the U.S. labor market, more than 300,000 non-farm jobs created can be said to be beyond the expectations of all Wall Street institutions. Previously, among the large financial institutions, Citi gave the highest non-farm forecast, but also only 240,000 new.
Us stock index futures fell sharply and Treasury yields rose sharply after the report was released. Investors have more reason to believe the Fed will keep interest rates high and even raise them further if inflation is high.
The CME's Fed-watch tool also showed that the market increased bets on a rate hike at the November meeting after the latest non-farm data. As of now, investors see a 71.3 percent chance that the Fed will hold rates at 5.25-5.5 percent in November and a 28.7 percent chance of a 25 basis point hike, up 8.6 percent from a day earlier.
Signs of danger
Leisure and hospitality added 96,000 jobs, government added 73,000, health care added 41,000 and professional, scientific and technical services added 29,000.
The film and recording industry lost 5,000 jobs in September as the Hollywood strike continued to grind to a halt, adding to the 45,000 jobs lost in the sector since May.
In addition, the United Auto Workers union is still negotiating with Detroit's Big Three automakers, and on Wednesday, the Kaiser Permanente union coalition launched the largest strike action in the history of U.S. health care workers.
The Labour disputes have further increased the vulnerability of the US economy, and the sharp wage increases demanded by workers could undermine the Fed's ongoing efforts by pushing up US inflation again.
Under the threat of high wages, the far better than expected non-farm data in the United States may set the scene for the Federal Reserve to continue to raise interest rates.
On the other hand, Wall Street is also warning that keeping interest rates high and continuing to raise them could deal a big blow to the U.S. economy and possibly trigger a severe recession.
Barclays Global Research Chairman Ajay Rajadhyaksha also noted that if U.S. economic growth slows, the fiscal challenges facing the U.S. government will also intensify. Assuming no spending cuts and interest rates remain high, higher deficits could lead to higher yields, which in turn would push the deficit higher.