US economy only added 29,000 jobs in September<\/p>\n
Newsflash: the US economy added much fewer jobs than expected last month, after a sharp slowdown in hiring.<\/p>\n
Nonfarm payroll employment rose by just 29,000 last month, the US Bureau of Labor Statistics has reported.<\/p>\n
That\u2019s much weaker than the 90,000 new jobs which economists had expected.<\/p>\n
The BLS says:<\/p>\n
double quotation markEmployment in all major industries changed little over the month.<\/p>\n
In another blow, August\u2019s jobs report has been revised down to show that 29,000 fewer jobs were created than first estimated \u2013 133,000, not 162,000.<\/p>\n
And July\u2019s jobs gains have been revised down by 31,000, from +21,000 to -10,000, meaning the US economy lost jobs in July.<\/p>\n
Share<\/a><\/p>\n Key events<\/p>\n Nasdaq Composite hits all-time high<\/p>\n Newsflash: America\u2019s technology stock index has hit a record high, as traders express relief that today\u2019s jobs report might dampen the pressure to raise US interest rates. <\/p>\n The Nasdaq Composite has jumped by 1.6% in early trading in New York.<\/p>\n Rocket Lab (+7.4%) are leading the risers, followed by UK-based chip designer ARM Holdings (+6.9%).<\/p>\n Stocks are up more broadly, with the S&P 500 index rising by 1%.<\/p>\n Susannah Streeter, chief investment strategist at Wealth Club, explains why the slowdown in hiring across the US economy last month has cheered investors:<\/p>\n double quotation mark\u2018\u2019There\u2019s been a ripple of relief on financial markets as hopes rise that the Fed won\u2019t have to go so hard and fast in raising interest rates. Treasury and gilt yields have eased off, and equity markets are on a rising tide, as the rush of worry has started to recede.<\/p>\n The latest US jobs figures came in weaker than expected, with just 29,000 jobs added in September, compared with forecasts of around 90,000. That\u2019s a marked slowdown, although some of the weakness reflects a fall in government payrolls. But pay packets indicate that employees don\u2019t have the upper hand in demanding higher wages, with hourly earnings rising by just 0.1% over the month, taking annual wage growth down to 3%, its lowest rate since the pandemic.<\/p>\n The figures suggest the jobs engine is losing a little steam, but isn\u2019t spluttering to a halt, so the snapshot has been greeted as a dose of better news and a sign that the Fed may be a tad more wary about hiking borrowing costs.<\/p>\n Share<\/a><\/p>\n Here’s Nancy Vanden Houten, Lead US Economist at Oxford Economics<\/a>, on today\u2019s nonfarm payrolls data release:<\/p>\n double quotation markThe softer than expected September employment report makes a rate hike at the October meeting a closer call. However, we think the upside risks to inflation are still a bigger concern for the Federal Reserve and expect they will raise rates at the end of the month.<\/p>\n double quotation markNonfarm payrolls rose 29,000 in September and there were downward revisions to job gains for July and August. Still, on a trend basis, job growth is well in line with our estimate of the breakeven pace of job growth.<\/p>\n double quotation markThe unemployment rate edged up to 4.2% in September as the prime-age labor force participation rate continues to recover some of the plunge that occurred in June. Looking ahead, we expect the unemployment rate to hold steady around 4.2% with the risk skewed to the downside as labor force growth continues to slow.<\/p>\n Share<\/a><\/p>\n An October hike in US interest rates is now \u201cfirmly on the back foot\u201d, predicts Seema Shah, chief global strategist at Principal Asset Management:<\/p>\n double quotation mark\u201cA softer-than-expected jobs report should put an October Fed hike firmly on the back foot.<\/p>\n Weaker payrolls, softer wage growth and a higher unemployment rate all point to a labour market that\u2019s cooling rather than reaccelerating. That should take some steam out of Treasury yields and reduce the urgency for the Fed to act. CPI remains the decisive release, but today\u2019s data argues for patience, not panic. The Fed needs to see a reacceleration in inflation, not just resilience in growth, to justify another hike this year.\u201d<\/p>\n Share<\/a><\/p>\n Here\u2019s Bradley Saunders, North America economist at Capital Economics, on today\u2019s jobs report:<\/p>\n double quotation markThe softer employment gain and tick up in the unemployment rate in September is not enough to spoil the image of a labour market which is broadly performing well, though it may help to trim investors\u2019 expectations for how far the Fed will eventually tighten back towards our view for two more rate hikes.<\/p>\n The 29,000 rise in non-farm payrolls in September was notably weaker than the consensus 90,000 estimate, but not disastrous. A 17,000 drag in government payrolls was partly to blame. Meanwhile, the softer 23,000 rise in healthcare & social assistance payrolls rose may be linked to the Trump administration\u2019s recent decision to rescind Temporary Protected Status (TPS) and working authorisation for 350,000 migrants.<\/p>\n Share<\/a>Wage growth ‘more anaemic than expected’<\/p>\n US workers\u2019 average earnings growth has also slowed, which is not good news for Donald Trump ahead of next month\u2019s midterm elections.<\/p>\n Today\u2019s jobs repot shows that in September, average hourly earnings were 3.0% higher than a year ago, down from 3.1% in August.<\/p>\n Nic Puckrin, a former Goldman Sachs analyst, explains: <\/p>\n double quotation mark\u201cToday\u2019s ice-cold report shows the jobs market may not be as healthy as previous data might have suggested. Wage growth is more anaemic than expected at 3%, while payrolls came in well below expectations at 28,000, with August also revised down.<\/p>\n This is a fly in the ointment for the Fed: it\u2019s forcing the central bank to choose between two evils. Hike again, and you risk tipping the scale on unemployment at a time when Americans are already struggling with the cost-of-living crisis. Hold, and inflation could get out of control.<\/p>\n Share<\/a>Dollar weakens<\/p>\n The US dollar is edging lower against some other major currencies.<\/p>\n It\u2019s down by 0.5% against the Japanese yen, to \u00a5157.23\/$.<\/p>\n It\u2019s also lost 0.15% against the pound, which has risen to $1.322.<\/p>\n The dollar index, which tracks the greenback against a basket of other currencies, is down 0.25%.<\/p>\n Share<\/a><\/p>\n Wall Street is set to rally when trading begins in 45 minutes, as today\u2019s weak jobs report cools some fears of future interest rate rises.<\/p>\n The Dow Jones industrial average is forecast to rise by 0.85%, according to futures market pricing, with the tech-focused Nasdaq 100 up 1% in pre-market trading.<\/p>\n Share<\/a>US bond yields fall after weak jobs report<\/p>\n Today\u2019s weak US jobs report is bringing some comfort to the bond markets!<\/p>\n The prices of US Treasuries are rising, which is pulling down the yield (or rate of return) on these bonds away from the multi-year highs set earlier this week.<\/p>\n The yield on 10-year US Treasuries has fallen by 6 basis points (or 0.06 of a percentage point) to 5.174%. That pulls it away from the 24-year high recorded yesterday.<\/p>\n 30-year US Treasury bonds are recovering too; the yield here is down by 4.5bps to 5.568%.<\/p>\n That\u2019s not because bond investors like the sound of Americans strugging to find work. It\u2019s because it will be harder for the US Federal Reserve to raise interest rates, to fight inflation, if the jobs market is weakening. The Fed has a dual mandate \u2013 to deliver price stability and full employment.<\/p>\n Share<\/a>Where were jobs created, or lost, in the US last month<\/p>\n Health care continued to be a creator of jobs last month \u2013 hiring increased by 17,000 in September, including gains at ambulatory health care services and in hospitals.<\/p>\n Employment in construction rose by 11,000<\/p>\n Manufacturing employment rose by 9,000.<\/p>\n But financial activities fell by 7,000.<\/p>\n The BLS adds:<\/p>\n double quotation markEmployment also showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; professional and business services; social assistance; leisure and hospitality; other services; and government.<\/p>\n Share<\/a>US economy only added 29,000 jobs in September<\/p>\n Newsflash: the US economy added much fewer jobs than expected last month, after a sharp slowdown in hiring.<\/p>\n Nonfarm payroll employment rose by just 29,000 last month, the US Bureau of Labor Statistics has reported.<\/p>\n That\u2019s much weaker than the 90,000 new jobs which economists had expected.<\/p>\n The BLS says:<\/p>\n double quotation markEmployment in all major industries changed little over the month.<\/p>\n In another blow, August\u2019s jobs report has been revised down to show that 29,000 fewer jobs were created than first estimated \u2013 133,000, not 162,000.<\/p>\n And July\u2019s jobs gains have been revised down by 31,000, from +21,000 to -10,000, meaning the US economy lost jobs in July.<\/p>\n Share<\/a><\/p>\n French president Emmanuel Macron \u2060will chair a video call with his \u2060counterparts from \u2060the \u200bG7 from 2.30pm local time (1.30pm BST) to discuss possible measures on the world markets \u2060for crude and refined \u200bproducts, the \u200cElysee Palace \u200chas said in a statement.<\/p>\n This follow US pressure on European nations to release additional diesel stockpiles in an \u200battempt \u200bto reduce \u200bsurging fuel prices.<\/p>\n Share<\/a>UK mortgage rates hit new highs<\/p>\n UK mortgage rates have hit the highest levels in more than two years this morning, pushed up by the turmoil in the bond markets.<\/p>\n The average two-year fixed residential mortgage rate has now risen to 5.96%, up from 5.93% yesterday, Moneyfacts reports. That\u2019s the highest since 30 June 2024.<\/p>\n The average 5-year fixed residential mortgage rate has risen to 5.98%, up from 5.95% yesterday, and the highest since 29 September 2023.<\/p>\n Share<\/a><\/p>\n This morning\u2019s jump in eurozone inflation hasn\u2019t prevented stock markets in the region recovering some of yesterday\u2019s losses.<\/p>\n Germany\u2019s DAX index has gained 1.1% so far today, while France\u2019s CAC is up 0.8%.<\/p>\n Traders will be reassured by the drop in the oil price today \u2013 Brent crude is still down around 2.4% at $99.87 a barrel.<\/p>\n Share<\/a><\/p>\n High fuel prices are likely to push eurozone inflation to 4% by the end of the year, predict analysts Bill Diviney and Adrian Quinn at ABN Amro.<\/p>\n They told clients:<\/p>\n double quotation markWe expect inflation to continue to move higher over the coming months, although the biggest of the rises is probably behind us with today\u2019s release. Our base case assumes energy prices stay elevated well into 2027, and the broadening pass-through from energy to other categories is expected to push inflation to a peak of a little over 4% by the turn of the year.<\/p>\n The still-rising inflation trajectory alongside the continued diplomatic failure to fully resolve the energy supply crunch is likely to keep the ECB\u2019s Governing Council hiking rates over the coming months<\/a>. We expect two additional rate hikes by the ECB, ultimately taking the deposit rate to 3%.<\/p>\n