Payrolls Stall at 29,000; October Hike Odds Collapse
The U.S. economy added just 29,000 jobs in September. Economists expected 90,000. The unemployment rate, released at 8:30 a.m. ET (3:30 p.m. in Istanbul), rose to 4.2% from 4.1%.
Revisions made the picture weaker. July was cut to −10,000 from +21,000, and August to 133,000 from 162,000. That is 60,000 fewer jobs over two months.
Wages cooled too. Average hourly earnings rose 3.0% from a year earlier, below the 3.2% forecast.
The Fed raised its policy rate by 25 basis points to 3.75% in September. The next meeting is October 28.
This is the opposite of what the market priced a week ago. Odds of an October hike were near 70% last week. After the data, they fell as low as 12%, according to pricing cited by Reuters.
The market read bad news as good news this morning.
Yields fell and stock futures rose. The 10-year Treasury yield dropped 6 basis points to 5.18%. The 2-year fell 7 basis points to 4.72%.
Some economists blame a late Labor Day for a seasonal distortion. Weekly jobless claims remain at their lowest since July. So the report alone does not confirm a new trend.
Nike is the second story. After Thursday's close (October 1), it reported $11.21B in revenue, below the roughly $11.4B consensus. Earnings of $0.48 a share beat the $0.44 estimate.
