In this morning’s data, the economy added 254,000 jobs in September, much higher than expected and the previous month was revised higher. The Health Care and Social Assistance industry and the Retail Trade industry were among those that were relatively strong, while the Transportation and Warehousing industry was relatively weak. The Unemployment Rate ticked one tenth lower to 4.1% and the Labor Force Participation Rate at 62.7% is the same as it has been for a few months. Average Hourly Earnings increased 0.4% in September, more than expected, and grew 4.0% on an annual basis. In addition, Average Weekly Hours were 34.2, which is one tenth less than the previous month.
Overall, a strong jobs report with a headline number that is well above expectations coupled with a drop in the unemployment rate. Average hourly earnings were also higher than expected and the annual rate is slightly above the 50-year average. The labor market is resilient in the current environment.
The Federal Reserve remains on the path to continue to ease policy but may not need to rush considering these data points this morning. The pace of additional rate reductions and adjustments to the end target rate will be closely watched in the coming weeks, including the impact on the labor market and consumers as we work through the upcoming earnings season.
Following the release of the jobs report, the yield on the U.S. 10-year treasury ticks higher and equity futures are also higher as we head into the market open.
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