Source: Jin10 Data
Author: Yang Large Cap

The US labor market added far more new jobs in September than expected, while the unemployment rate unexpectedly decreased, reflecting a much stronger employment market outlook than Wall Street's expectations.

Data released by the US Bureau of Labor Statistics on Friday showed that the job market added 0.254 million new jobs in September, higher than the economists' expected 0.14 million, and also higher than the revised 0.159 million in August. At the same time, the unemployment rate dropped from 4.2% in August to 4.1%.

As an important indicator of measuring inflationary pressure, the wage growth rate increased from 3.9% in August to 4% year-on-year, with a month-on-month increase of 0.4%, consistent with the August data; the labor force participation rate remained unchanged from the previous month at 62.7%.

After the data was announced, spot gold plummeted by $20 in the short term, while the US dollar index soared, surging above the 102 level.

It is worth noting that the US Bureau of Labor Statistics revised the nonfarm payroll employment figures for July upward from 0.089 million to 0.144 million; and for August, the nonfarm payroll employment figures were revised up from 0.142 million to 0.159 million. After the revisions, the total nonfarm employment figures for July and August were 0.072 million higher than the pre-revision numbers.

Following the strong employment data, traders further bet that the Fed will continue to cut interest rates by 25 basis points in November and December, and reduce the expected rate cut for the future four Fed meetings to less than 100 basis points.

Earlier data released this week showed that job demand remains healthy, while layoffs remain low, so the employment report may alleviate concerns about the job market cooling too quickly. Employment data may increase the likelihood of a 25 basis point rate cut by the Federal Reserve next month, after the Fed made a significant 50 basis point rate cut at the September meeting.

Fed Chairman Powell recently countered investors' expectations of another 50 basis point rate cut in November, stating, "This committee does not feel an urgency to quickly lower rates."

Last month's job growth was primarily driven by leisure and hospitality, as well as medical care and government sectors.

Analyst Audrey pointed out that today's employment data once again reminds that the market often underestimates the U.S. economy. This is a convincing strong report that can temporarily halt recent recession discussions, which will enhance the positive sentiment towards the US dollar in the past few trading days. While euro data performance is mediocre, recent U.S. data unexpectedly shows an uptrend, aligning with the recent downward trend of the euro/dollar.

However, the market and economists are likely to focus on the October non-farm employment report, which will include the impact of the strike by about 0.033 million Boeing factory workers last month. Another large-scale strike initiated by American dock workers ended three days later and may not have a direct impact on this data.

However, another concern is the hurricane, which has caused destruction in large areas of the southeastern United States. Some areas are working to reopen roads and restore power, indicating that business recovery will take time.

Editor/Jeffy