ICYMI: The economy added another 254,000 jobs in September. Employment continued to trend up in several industries. 📈 https://t.co/iFGR6uizeK #JobsReport pic.twitter.com/2qG4Kf2m8y
— U.S. Department of Labor (@USDOL) October 6, 2024
The US job market showed surprising strength in September, with employers adding 254,000 jobs and the unemployment rate dropping to 4.1%. This unexpected surge in job growth has bond traders bracing for a “no landing” scenario, where the economy keeps growing and inflation reignites, limiting the Federal Reserve’s ability to cut interest rates. Treasury yields surged in response to the strong employment figures, reflecting concerns that the Fed may have to maintain higher interest rates for longer than previously anticipated.
This could prevent the central bank from cutting rates even if economic conditions soften in the future. Julia Chatterley, a CNN reporter, broke down the numbers, noting that the employment gains surpassed most economists’ expectations.
Another job report smashed out of the park by the Biden/Harris Administration.
In September, we added jobs to every sector of the economy from health care to the service industry, totaling over 250,000 added jobs last month.https://t.co/9BHvkyNl2C
— Senator Ben Cardin (@SenatorCardin) October 6, 2024
The uptick in job creation is seen as a positive sign for the economy, indicating resilience amid various economic uncertainties.
Last week showed us that the US labor market is even stronger than we thought.
"It’s not just a strong recovery, but the kind of recovery that is quite sustainable." @mikemadowitz shares his thoughts in @nytimes ⤵️ https://t.co/vpWt9YJxd7
— Roosevelt Institute (@rooseveltinst) October 7, 2024
Surge in jobs boosts US markets
Stocks advanced on Friday following the expectation-defying jobs report, with investors gaining confidence in the health of the economy. The S&P 500 rose 0.9%, the Nasdaq Composite jumped 1.22%, and the Dow Jones Industrial Average added 341.16 points to notch an all-time closing high.
The “no landing” scenario – a situation where the US economy keeps growing, inflation reignites and the Fed has little room to cut interest rates – had largely disappeared as a bond-market talking point in recent months https://t.co/7kIN4xKqSC via @markets pic.twitter.com/7mhy59qa48
— Gregory Daco (@GregDaco) October 7, 2024
Michelle Cluver, head of ETF model portfolios at Global X, said, “After a summer of weak labor data readings, this is a reassuring indication that the U.S. economy remains resilient, supported by a healthy labor market. We remain in an environment where good economic news is good news for the equity market as it increases the potential for a soft landing.”
Megacap tech names and financial stocks were among the top performers on Friday, with the S&P 500 energy sector posting its best week since October 2022 due to rising crude oil prices amid intensifying conflict in the Middle East. Looking ahead, investors should expect closely watched inflation data, minutes from the Federal Reserve’s September policy meeting, and several major corporate earnings reports in the coming week.
Rick Rieder, BlackRock’s chief investment officer of global fixed income, believes the Fed will move forward with small rate cuts, stating, “We think that the rate descent should continue, but with today’s strong data it’s more likely that the Fed will move in 25 basis point (bps) cut increments, and not the near-term 50 bps cuts the market had been pricing in.”
Gina Bolvin, president of Bolvin Wealth Management, expressed increased optimism following the jobs report, saying, “This morning’s report is good for stocks, and the economy continues to show incredible resilience. I’m more bullish today than I was yesterday — and I was a bull then.”
