Well, folks, it’s been a bit of a wait, but we finally have some fresh data on the U.S. labor market. And let me tell you, it's a bit of a mixed bag! The U.S. added a stronger-than-forecast 119,000 jobs in September, which sounds great, right? But here's the kicker: the unemployment rate actually rose to 4.4%.
This report was seriously delayed thanks to the federal government shutdown, leaving us all guessing during a pretty volatile period. So, what does it all mean?
What I'm Seeing
Job Growth Surprised Me: Economists were only expecting about 50,000 new jobs, so 119,000 is a significant beat. That's a good sign for hiring.
Unemployment Ticked Up: The unemployment rate climbed to 4.4%, a little higher than the 4.3% forecast. This suggests that while jobs are being created, there might be more people looking for work, or perhaps some underlying softening.
Fed Rate Cuts Are Fading: This delayed report comes as the market is already pulling back on expectations for a Fed rate cut in December.
Bitcoin and Nvidia Shine: Bitcoin actually held its ground around $91,900 after Nvidia dropped some strong earnings news. That's a story for another day, but it shows where market attention is shifting!
More Delays Ahead: We won't get the next up-to-date labor data until mid-December, which leaves the Fed in a tough spot for their upcoming meeting.
Labor Market Firmer Than I Expected, But...
The Bureau of Labor Statistics data shows nonfarm payrolls up by 119,000. This definitely beats the August figures, which were revised down to a 4,000-job decline.
However, that unemployment rate tick-up to 4.4% is something to keep an eye on. It hints at a potential softening, even with the stronger hiring. The late release of this data really complicates our economic outlook, especially for policymakers and traders who need timely information.
My Market Reaction: Bitcoin Holds, Nasdaq Jumps
Bitcoin, interestingly, maintained its modest overnight gains, trading near $91,900. Nvidia's strong earnings and optimistic outlook seemed to calm things down a bit on Wednesday, and that positive sentiment carried over to U.S. equity futures:
Nasdaq futures: +1.9%
S&P 500 and Dow futures: also higher
10-year Treasury yield: steady at 4.11%
U.S. dollar index: slightly stronger
It seems the jobs report didn't dramatically shake things up, as the market had already pretty much ruled out a December rate cut.
Don't Expect a Fed Rate Cut Now
Traders had already largely dismissed the idea of an interest rate cut in December. Why? Well, the Federal Reserve has been sounding pretty hawkish lately, and the missing labor-market data didn't help. Plus, inflation persistence is still a concern.
So, these numbers — strong on payrolls but a bit weaker on unemployment — probably won't change those expectations. And with no fresh employment report until mid-December, the Fed will be going into its final 2025 meeting with a bit of a blind spot when it comes to labor conditions.
My Outlook
This September report is giving us a backward look at a labor market that's resilient but showing some subtle signs of cooling. We're all waiting for the next batch of timely data, but it might come too late for some key policy decisions.
For now, here’s my summary:
Hiring is stronger than expected.
Unemployment is rising.
The Fed’s December plans probably won't change.
It seems crypto and equities are currently reacting more to earnings strength, tech momentum, and shifting rate expectations rather than these delayed economic reports.