Soft September jobs report sends markets higher
SPY•U.S. payrolls rose by 29,000 in September, below economists’ 90,000 forecast, while the unemployment rate edged up to 4.2%. Stocks and bonds rose, Treasury yields fell, and market expectations for an October Fed rate increase retreated.
1. Jobs growth slows
Nonfarm payrolls increased by 29,000 in September after a downwardly revised 133,000 gain in August. Economists had forecast a 90,000 increase; the unemployment rate rose to 4.2% from 4.1%.
2. Markets react
Major U.S. indexes rose modestly after the report, with S&P 500 futures up 0.9% and Nasdaq futures up 1.2%. Treasury yields fell: the 2-year yield dropped 6 basis points to 4.725%, the 10-year fell 5 basis points to 5.182%, and the 30-year declined 3 basis points to 5.573%. Expectations for an October rate increase fell as low as 12%, then moved back to 19%.
3. Seasonal factors in focus
Economists said seasonal adjustment volatility and the late Labor Day may have contributed to the weak payroll gain and August revision. The article noted no signs of a broad increase in layoffs, while economists expected high energy prices and strained supply chains to begin disrupting the labor market by year-end and into 2027.
