Soft September jobs report sends markets higher
SPY•U.S. payrolls rose 29,000 in September, below economists’ 90,000 forecast, while the unemployment rate edged up to 4.2%. Stocks and bonds rose, and market expectations for an October Federal Reserve rate increase retreated.
1. Hiring slowed in September
Nonfarm payrolls increased by 29,000 after August’s gain was revised down to 133,000. The unemployment rate rose to 4.2% from 4.1%. Economists noted that seasonal-adjustment volatility may have affected both the September figure and the August revision.
2. Markets respond to report
Major U.S. indexes rose modestly, with S&P 500 futures up 0.9% and Nasdaq futures up 1.3%. Treasury yields fell: the 2-year yield dropped 6 basis points to 4.725%, while the 10-year yield fell 5 basis points to 5.182%. Market expectations for an October rate increase fell as low as 12% before recovering to 19%.
3. Economists weigh outlook
Economists cited the report as evidence against a near-term labor-market retightening, while noting that payroll gains remained positive. Some said the report reduced the risk of an October rate hike, though one economist said higher energy prices and market pressure could still prompt the Federal Reserve to act this month.
