U.S. stock index futures rose sharply after the release of September jobs data, as nonfarm payroll growth came in well below market expectations.
US Payroll Growth Misses Expectations
According to the September US jobs data, nonfarm payrolls increased by 29,000, compared with the market expectation of 90,000. The previous month’s increase was revised down to 133,000 from 162,000.
Private-sector nonfarm payrolls rose by 46,000, below the expected 85,000. The previous month’s figure was revised to 89,000 from 127,000.
Manufacturing employment increased by 9,000 in September, compared with expectations for a 10,000 increase. The previous manufacturing figure was revised to 15,000 from 16,000.
Government employment fell by 17,000 on a seasonally adjusted basis. The September figure referenced in the data was revised to 44,000, from an originally reported 35,000.
Unemployment Rate Rises to 4.2%
The U.S. unemployment rate increased to 4.2% in September from 4.1%, against expectations of 4.1%.
The U.S. U6 unemployment rate stood at 7.6%, below the expected 7.7% and the previous reading of 7.7%.
The labor force participation rate was 61.8%, compared with an expected 61.6% and the previous reading of 61.6%. Average weekly hours worked remained at 34.4, against expectations of 34.3.
Treasury Yields Fall as Fed Rate Hike Bets Ease
Swap contracts linked to the date of the Federal Reserve meeting showed that markets were no longer fully pricing in a full rate hike this year, while traders cut bets on a Fed rate hike in October.
Following the jobs data, the 30-year U.S. Treasury yield fell 2.8 basis points to 5.575%, the 2-year yield dropped 7.7 basis points to 4.71%, and the 10-year yield declined 5.6 basis points to 5.18%.
Spot gold rose approximately $40 to a high of $4,226 per ounce, while spot silver broke above $62 and gained 1.67% on the day.
The U.S. Bureau of Labor Statistics said the labor force participation rate remained largely unchanged at 61.8%, while the employment-to-population ratio stood at 59.2%. The number of people seeking employment but not yet in the labor force was 5.8 million.
July payrolls were revised from +21,000 to -10,000, while August payroll growth was revised from 162,000 to 133,000. The combined number of jobs added in July and August was therefore revised down by 60,000.
Nasdaq futures briefly rose more than 1%, while Dow Jones and S&P 500 futures gained nearly 1% following the release.
Wage Growth Slows in September
Average hourly earnings increased 3% year-on-year in September, below the expected 3.2% and the previous reading of 3.10%.
On a monthly basis, average hourly wages rose 0.1%, below the expected 0.30%.
Q1. What did the US jobs data show in September?
U.S. nonfarm payrolls increased by 29,000 in September, below the expected 90,000.
Q2. What was the US unemployment rate in September?
The U.S. unemployment rate rose to 4.2% in September from 4.1%.
Q3. How much did US hourly wages increase in September?
Average hourly earnings increased 3% year-on-year and 0.1% month-on-month in September.
Q4. How much did private-sector payrolls increase?
U.S. private–sector nonfarm payrolls increased by 46,000 in September.
Q5. How did stock index futures react to the jobs data?
U.S. stock index futures rose sharply after the September jobs data was released.
