The News
All eyes are on the labor market, and this month, that’s a good thing.
The US economy added 254,000 jobs in September, blowing past the expected 150,000 increase, according to a new Bureau of Labor Statistics report released Friday. The unemployment rate also beat the expected 4.2%, which matched August’s figure, ticking down to 4.1%.
The jobs data is the first to come from the Labor Department after the Federal Reserve’s September rate cut, and the first of two jobs reports the central bank will reference at its November meeting, when it is expected to lower interest rates again. Fed chief Jerome Powell hinted at a quarter-point cut in a speech Monday, as long as “the economy performs as expected.”
After signs of weakening in the labor market in recent months, the report will likely provide the evidence the central bank needs to support its “soft landing” argument.
The September data comes off a mixed August report, when unemployment fell to 4.2% from 4.3% in July, but the economy added fewer nonfarm payroll jobs than expected.
SIGNALS
Helene and Boeing strike may distort October’s report
September’s jobs report may be the last normal reading on the economy for a while, according to CNN: October’s data — to be published just days before the US presidential election — will factor in the aftermath of Hurricane Helene, which devastated much of the Southeast, as well as the ongoing, weekslong strike at Boeing impacting 33,000 employees. These events “are not going to permanently alter the trajectory of the labor market; but September is probably our last clean reading on the labor market for a while,” an economist told CNN.
Jobs report adds momentum to Harris campaign
With the economy is a central talking point for both presidential candidates, Democratic nominee Kamala Harris “probably could not have hoped for a better run of pre-election economic data than what the United States has enjoyed over the last month,” The New York Times wrote. Recent reports, including Friday’s labor reading, indicate that the economy is growing and inflation is slowing — and voters are taking notice. While a September survey showed voters trusted Donald Trump more on the economy, a new October poll indicates Americans have increasing confidence in Harris to handle economic issues, even more so than the former president.
Investors change their minds about a second big rate cut
Just last week, more than half of investors were betting the Fed would deliver two consecutive large interest rate cuts, trimming another half-point in November. But after Friday’s jobs report, that possibility appears non-existent, according to CME Group’s FedWatch tool. More than 97% of traders expect the central bank to make a quarter-point cut next month, while the remaining few foresee no rate cut at all, Friday’s data shows. “Friday’s jobs report was so strong that it means the Federal Reserve may ultimately not need to cut interest rates as much as investors had been thinking,” the Associated Press reported.