According to the latest statistics, the number of non-farm jobs in the United States last month exceeded all economists' expectations, while the unemployment rate unexpectedly decreased and wage growth unexpectedly accelerated. Although it calmed fears of a significant deterioration in the labor market driving the U.S. economy into recession, the financial markets significantly cooled expectations of a Fed rate cut before the end of this year. Economists believe that with the release of this non-farm data, the U.S. economy has achieved the Fed officials' long-awaited "soft landing"— successfully lowering inflation rates through aggressive interest rate hikes while maintaining stable growth in the job market and overall economy. The U.S. economic "soft landing" undoubtedly serves as a positive catalyst for global financial markets.

Latest statistics show that following the unexpected upward revision of non-farm employment numbers by 0.072 million in the previous two months, non-farm employment in September significantly exceeded expectations, increasing by 0.254 million, marking the largest increase in non-farm additions in six months. In comparison, economists' median expectation was only 0.15 million, and the latest non-farm figures surpassed even the most optimistic expectations from media surveys. According to another data released by the U.S. Bureau of Labor Statistics on Friday, the unemployment rate unexpectedly dropped to 4.1%, and hourly wage income grew by 0.4% higher than economists' expectations (4.2% for the unemployment rate and 0.3% for wage growth).

Combining data from earlier this week, it is evident that U.S. companies still have a healthy demand for workers while layoffs remain very low. The job report is expected to significantly alleviate economists' concerns about the U.S. labor market cooling too rapidly and fears of an economic recession. The situation in the U.S. labor market is closely related to U.S. consumer spending, where employment levels and wage incomes are crucial for overall consumption. The resilience of consumer spending will undoubtedly drive the U.S. economic ship forward, as 70%-80% of the U.S. GDP components are closely related to consumption.

The latest non-farm employment data also shows that due to potential reasons such as personal economic improvement, the number of Americans working part-time unexpectedly decreased, and those recently unemployed were able to quickly find work elsewhere.

Looking ahead to the future of the USA economy, after the Federal Reserve cut interest rates by 50 basis points to kick off the rate-cutting cycle, some economists believe that the USA economy has successfully experienced a 'soft landing', or is very close to one, given the recent incredibly strong nonfarm payrolls and consistently better-than-expected initial jobless claims.

The expectation of a 50 basis point rate cut has significantly diminished.

For the stocks market, such strong employment data may not be what investors generally want to see, as unexpectedly strong employment data may significantly increase the possibility of Federal Reserve policymakers cutting rates by 25 basis points next month or even choosing to pause the rate cut. Earlier, they conducted a larger rate cut in September - an unexpected 50 basis point cut initiated the rate-cutting cycle.

Jerome Powell of the Federal Reserve reiterated this week that safeguarding the US labor market was part of the reason the Fed decided to launch a looser period of easing with a larger rate cut in September. The Fed hopes to combat inflation without harming the labor market growth trend. He also emphasized this week that his Fed colleagues believe that further cooling of the labor market is not necessary to bring inflation down to the Fed's 2% target.

Powell has recently reiterated multiple times that Fed officials are not seeking or welcoming further cooling of the labor market. Powell and other Fed officials have recently hinted through various wordings that the Fed's future main focus is to avoid economic recession while ensuring a 'soft landing' for the US economy.

The latest nonfarm payroll data shows that the increase in recruitment last month was mainly driven by the leisure and hospitality industry, medical care and government sectors. The employment diffusion index, which measures the breadth of private employment changes, rose to its highest level since the beginning of the year. However, manufacturers have been laying off workers for the second consecutive month.

Following the data release, US equity index futures, the US dollar, and government bond yields unexpectedly rose. Before the data release, strategists from Bank of America and JPMorgan both indicated that the unexpectedly strong nonfarm payrolls might lead to a downturn in the US stock market.

The latest pricing in the forward market indicates that traders are generally betting that the Fed will announce a 25 basis point rate cut in November, rather than the previously common bet of 50 basis points. The CME 'FedWatch Tool' shows that interest rates futures traders have largely shifted to betting on a 25 basis point rate cut after the unexpectedly strong nonfarm data release. The latest CME statistics show that the probability of a 25 basis point rate cut by the Fed in November exceeds 90%, compared to about 50%-60% before the nonfarm release.

Federal Reserve officials are also closely monitoring the rate of wage growth because it can help the market understand consumer spending expectations, which is the most core engine of the US economy, and there is no other, stable and non-inflationary wage growth rate is what officials are very keen to see.

The latest hourly income has increased by 4% compared to the same period last year, the largest increase in four months. However, wage growth for production-side and non-supervisory employees unexpectedly cooled to 3.9%. Overall, the wage data meets expectations and aligns with Federal Reserve officials' tone of wages not stimulating inflation.

The unexpectedly declining unemployment rate is the first time in nearly a year.

The nonfarm employment report released in October includes the negative impact of the approximately 0.033 million factory workers strike at Boeing last month. Another large-scale strike by US dock workers ended three days later and may not have a directly clear impact on employment numbers for the month.

However, another issue affecting employment is Hurricane Helen, which has caused casualties and massive economic damage in large areas of the southeastern United States. Some areas in the region are struggling to reopen roads and restore electrical utilities, indicating that commercial recovery still takes time.

The latest nonfarm employment report data also shows that the so-called underemployment rate - including those working part-time for economic reasons and workers who have given up looking for work - unexpectedly dropped to 7.7% in September, marking the first decline in this statistic in nearly a year.

The latest labor force participation rate (the proportion of the population working or looking for work) has remained near 62.7% for three consecutive months. The participation rate for the 25-54 age group (also known as the prime working-age labor force) unexpectedly dropped to 83.8%.

While layoffs are not the most core feature of the cooling off of the US labor market, layoffs in other countries are intensifying. Samsung Electronics is laying off employees in Southeast Asia and Oceania as part of its global workforce reduction plan. Volkswagen is implementing extensive layoffs in the Asian region and considering closing factories in Germany.

jpmorgan officials' dream of a 'soft landing' may have truly materialized.

In terms of economic data, the latest release of non-farm payroll data exceeding expectations, better-than-expected unemployment rate, and higher-than-expected long-term GDP growth rate, combined with the recent cooling trend in initial jobless claims over the past few weeks, along with the crucial service sector in the U.S. continuing to show PMI growth expansion exceeding expectations, coupled with sustained inflation decline, perfectly align with the vision of a 'soft landing' for the U.S. economy cherished by jpmorgan officials. Consequently, economists are enthusiastically declaring a successful 'soft landing' for the U.S. economy.

Following the brief economic recession caused by the pandemic, even after the Federal Reserve's aggressive interest rate hikes post high inflation, pushing the U.S. benchmark interest rate to the highest level in over 20 years at 5.25%-5.5%, the U.S. economy rebounded remarkably. The comprehensive annual updates from the U.S. Bureau of Economic Analysis show that from the second quarter of 2020 to the end of 2023, the U.S. Gross Domestic Product (GDP) has an average growth rate of 5.5% adjusted for inflation. Compared to the previously announced 5.1% increase, the revised figure is noticeably more optimistic.

The U.S. Bureau of Economic Analysis has revised last year's U.S. economic growth rate from 2.5% to 2.9%, with the adjustments primarily concentrated in the first half of the year.

In 2022, the real Gross Domestic Product (GDP) of the USA grew by 2.5%, which is 0.6 percentage points stronger than the previously announced data. Additionally, the latest data shows that in that year, there was only a decline in the first quarter's annualized quarterly rate of GDP, rather than the technical economic recession indicated by the initial GDP data reporting a decline for two consecutive quarters.

The final data revised by the government still shows an upward revision in the USA's total domestic income in 2023 (i.e. GDI, the income and costs generated from the production of goods and services). The inflation-adjusted growth rate of last year's GDI has significantly increased from 0.4% to 1.7%.

The exceptionally strong rebound trend in the U.S. economy in recent years fully reflects the epic stimulus effects brought about by trillions of dollars in fiscal expenditures and the comprehensive quantitative easing by jpmorgan in the aftermath of the pandemic.

Overall, this unprecedented bottoming out rebound process of the usa economy that started in the second quarter of 2020 is one of the strongest economic expansion cycles in the usa economy since World War II.

We believe that the situation of a 'soft landing' in the US economy has become very clear. However, it is too early to conclude that the unexpected 50 basis points rate cut by the Federal Reserve in September has fully stabilized the labor market. It is more likely that the Fed's next rate cut choice will be the normal pace of a 25 basis points rate cut in November." Bloomberg Economics economists Anna Wong, Stuart Paul, Eliza Winger, and Estelle Ou said.

Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives, stated after the September non-farm payroll release: "Given this employment report, the Fed is more likely to make the correct monetary policy decision and will not lag behind the curve as expected by the market." She also pointed out that these data significantly reduced the possibility of another 0.5 percentage point rate cut.