Unexpected US Job Growth Surprises Market Expectations
U.S. employers and their human resources teams seem to be actively seeking talent, ultimately surpassing analysts' expectations for new hires by 43%.
The unexpectedly strong jobs report surprised many, especially after months of slowing hiring raised concerns about a recession and led the Federal Reserve to cut interest rates by 50 basis points last month.
U.S. employers added 254,000 jobs in September, breaking the widely estimated 145,000 and significantly exceeding the figure for August.
In September, U.S. employment growth reached its highest level in six months, with the unemployment rate dropping to 4.1%. This indicates that the economy remains robust and may reduce the need for the Federal Reserve to further cut interest rates significantly this year.
In addition to the better-than-expected growth in non-farm employment numbers announced by the Department of Labor on Friday, wages also grew steadily last month.
This positive news quickly affected the market, triggering a broad rebound. The S&P 500 rose by about 0.7% in the morning, the technology stock-dominated Nasdaq Composite Index rose by more than 1.1%, and the Dow Jones Industrial Average rose by 0.5% shortly after the opening.
The dollar also strengthened, rising against other currencies, pushing the U.S. Dollar Index to 102.70, marking a fifth consecutive day of gains.
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This report was released after last week's annual benchmark revision of national economic data, which showed that the economic situation is much better than previously estimated, with growth, income, savings, and corporate profits all revised upwards.
Federal Reserve Chairman Jerome Powell admitted earlier this week that the economic outlook has improved, downplaying expectations for another 50 basis point rate cut in November. He pointed out, "This is not a committee that thinks it needs to rush to cut interest rates."
Meanwhile, traders are waiting for other key reports, including the Consumer Price Index (CPI), which remains a priority for the Federal Reserve as it aims to balance its dual mandate of maximizing employment and keeping the inflation rate at a 2% annual growth rate.
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