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Pre-Markets Surge on Weaker Jobs Addition in September
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The final trading day of this week also closes out the latest “Jobs Week” ahead of today’s open, with the Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) posting a headline +29K new jobs created for September. This is well below the +84-90K anticipated. The Unemployment Rate ticked up 10 basis points (bps) to +4.2%, still an historically low number.
The prior two months saw downward revisions: August’s relatively robust +162K originally reported is now +133K, while July, originally posted at a loss of -23K and revised strongly upward to +21K a month ago, has now settled back to -10K on this final revision. The trailing four-month average in BLS jobs growth is now +46K — roughly in line with the projected number of retiring Baby Boomers per month — which is down from +67K new jobs created on average for the previous four months.
Thus, we’re basically flat on jobs growth currently. Healthcare led once again with +17K new hires last month, with +11K and +9K coming from Construction and Manufacturing, respectively — both good monthly tallies. Financial Activities, however, as we saw in ADP’s (ADP - Free Report) private-sector payrolls Wednesday, was negative: -7K.
One caveat to our overall agreeable employment situation these days is in the underperformance in Average Hourly Earnings: +0.1% versus expectations of +0.3%, to an overall average of $37.81 per hour. This is the lightest print since December of last year, and is clearly not keeping up with inflation. (The Inflation Rate on August CPI was +0.4% month over month.) Considering the pain Americans currently feel in the economy anecdotally, this line item seems to speak louder than most.
Elsewhere, little if any surprises: Average Workweek was steady month over month at 34.4 hours — still historically low. Labor Force Participation ticked up 20 bps from expectations to 61.8%, but this remains on the thin side. The U-6 level — aka “real unemployment” — was 10 bps lower than anticipated at +7.6%, the lowest figure since January of 2025.
Pre-Market Futures Soar on Weaker Jobs Numbers
Immediately upon this lackluster jobs report hitting the tape, bond yields started to bid downward: the all-important 10-year went from +5.226% to +5.167%, the 2-year from +4.775% to +4.716%, and the 30-year (which helps predict mortgage rates) from +5.592% modestly lower to +5.572%. Major stock market indexes took these numbers and ran: the Dow rose +460 points, the Nasdaq +375 and the S&P 500 +71 points.
We’ll see August Factory Orders after today’s open, but otherwise we’ll be pretty quiet on the economic market front today and through next week. Delta Air Lines (DAL - Free Report) will quietly kick off earnings season next Thursday morning, but the big banks like JPMorgan (JPM - Free Report) and Citigroup (C - Free Report) don’t report until the following week.
Therefore, we will once again keep an eye on the Strait of Hormuz and the projected fallout in the upcoming midterm elections, which are a month from next Tuesday. Clearly, equities traders are in a buying mood this morning after a less-than-stellar September, so we’ll see if this can continue.
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Pre-Markets Surge on Weaker Jobs Addition in September
The final trading day of this week also closes out the latest “Jobs Week” ahead of today’s open, with the Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) posting a headline +29K new jobs created for September. This is well below the +84-90K anticipated. The Unemployment Rate ticked up 10 basis points (bps) to +4.2%, still an historically low number.
The prior two months saw downward revisions: August’s relatively robust +162K originally reported is now +133K, while July, originally posted at a loss of -23K and revised strongly upward to +21K a month ago, has now settled back to -10K on this final revision. The trailing four-month average in BLS jobs growth is now +46K — roughly in line with the projected number of retiring Baby Boomers per month — which is down from +67K new jobs created on average for the previous four months.
Thus, we’re basically flat on jobs growth currently. Healthcare led once again with +17K new hires last month, with +11K and +9K coming from Construction and Manufacturing, respectively — both good monthly tallies. Financial Activities, however, as we saw in ADP’s (ADP - Free Report) private-sector payrolls Wednesday, was negative: -7K.
One caveat to our overall agreeable employment situation these days is in the underperformance in Average Hourly Earnings: +0.1% versus expectations of +0.3%, to an overall average of $37.81 per hour. This is the lightest print since December of last year, and is clearly not keeping up with inflation. (The Inflation Rate on August CPI was +0.4% month over month.) Considering the pain Americans currently feel in the economy anecdotally, this line item seems to speak louder than most.
Elsewhere, little if any surprises: Average Workweek was steady month over month at 34.4 hours — still historically low. Labor Force Participation ticked up 20 bps from expectations to 61.8%, but this remains on the thin side. The U-6 level — aka “real unemployment” — was 10 bps lower than anticipated at +7.6%, the lowest figure since January of 2025.
Pre-Market Futures Soar on Weaker Jobs Numbers
Immediately upon this lackluster jobs report hitting the tape, bond yields started to bid downward: the all-important 10-year went from +5.226% to +5.167%, the 2-year from +4.775% to +4.716%, and the 30-year (which helps predict mortgage rates) from +5.592% modestly lower to +5.572%. Major stock market indexes took these numbers and ran: the Dow rose +460 points, the Nasdaq +375 and the S&P 500 +71 points.
We’ll see August Factory Orders after today’s open, but otherwise we’ll be pretty quiet on the economic market front today and through next week. Delta Air Lines (DAL - Free Report) will quietly kick off earnings season next Thursday morning, but the big banks like JPMorgan (JPM - Free Report) and Citigroup (C - Free Report) don’t report until the following week.
Therefore, we will once again keep an eye on the Strait of Hormuz and the projected fallout in the upcoming midterm elections, which are a month from next Tuesday. Clearly, equities traders are in a buying mood this morning after a less-than-stellar September, so we’ll see if this can continue.