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September Jobs Report: What to Watch Friday

Economists expect slower hiring after August's surprise. With the Fed weighing another hike, wages and the unemployment rate may matter more than the headline.

By Global Terminal Staff · · 1 min read

A "We Are Hiring" sign in the window of a brick building
Photo: Eric Prouzet / Unsplash

Why it matters

  • The jobs report is one of the main inputs to the Fed's next rate decision on Oct. 27–28.
  • A strong report could push Treasury yields, already at 24-year highs, even higher.
  • Wage growth matters for inflation, which the Fed says is still too high.

The Labor Department releases its September employment report on Friday, Oct. 2, at 8:30 a.m. Eastern time. It arrives with the 10-year Treasury yield near its highest level since 2002 and Federal Reserve officials signaling that another rate increase may be needed.

The forecasts

MeasureForecastAugust
Nonfarm payrolls+98,000+162,000
Unemployment rate4.1%4.1%
Average hourly earnings, month+0.3%+0.3%
Average hourly earnings, year+3.2%+3.1%

Forecasts are the consensus compiled by Newsquawk.

Why August may overstate the trend

August's gain of 162,000 jobs surprised economists. Some think seasonal adjustment flattered it. Barclays estimated that, using the prior year's seasonal factors, August payrolls would have shown a decline of 74,000 instead, Newsquawk reported.

Other recent data point to a labor market that is cooling slowly but holding up. Initial jobless claims fell to 197,000 in the latest week, Yahoo Finance reported, and payroll processor ADP counted 90,000 new private-sector jobs in September, above the 70,000 expected, according to FXStreet.

What it means for markets

Fed officials have described the labor market as stable and close to full employment, and their focus has shifted to inflation. That makes wage growth an important number on Friday. Faster pay gains would add to the case for another hike at the Fed's Oct. 27–28 meeting.

A strong report could also lift Treasury yields further. A weak one could ease the pressure that has built in bond markets this week. Our lead story explains why yields have climbed.

We will update this story after the release.

Sources