US Jobs Piled Up in September, Blowing Past Expectations

US Jobs Piled Up in September, Blowing Past Expectations
Stéphane Renevier, CFA

5 months ago2 mins

What’s going on here?

US jobs piled up in September, with the latest data blowing past expectations.

What does this mean?

The state of the jobs market serves as a vital pulse check for the US economy, hinting at the health of both the country’s businesses and consumer spending. Nonfarm payrolls (NFP) are a major indicator of the market’s status: they track how many US jobs are added or lost in any given month, excluding a couple of sectors like farming. September’s release revealed that 336,000 jobs were added over the month, double what was expected. And because July and August’s numbers were revised higher after their first release, it seems the labor market was also more robust over the summer than initially estimated. The takeaway: the job market’s strong. Maybe too strong.

US jobs

Why should I care?

For markets: Up, up, and away.

Remember, the Federal Reserve (the Fed) has two jobs: to keep inflation in check and the job market stable. Inflation’s still well above target, and this robust jobs data may force the Fed to stick to its aggressive stance. No wonder, then, that investors are now expecting the central bank to hike interest rates – already sitting at a 22-year high – again before December.

US inflation

The bigger picture: The rate escape.

Rates staying higher for longer would weigh on the economy, making it more expensive for both everyday folk and businesses to borrow the cash they need. Plus, they can make issues pop up in unexpected places – just think of the trouble rising rates brought to US regional banks a few months ago. They wreak havoc on investments, too: high rates make it more tempting to save cash and bank the interest, and riskier assets like stocks end up less appealing as a result. That’s exactly why stocks, bonds, and commodities have all taken a slide lately, with markets fearing higher-for-longer rates and pushing prices down.

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