The US job market showed remarkable strength in September, with employers adding 254,000 jobs, far exceeding economists’ expectations of 150,000. The unemployment rate also dipped to 4.1%, despite predictions that it would remain steady at 4.2%. Michelle Cluver, head of ETF model portfolios at Global X, said, “After a summer of weak labor data readings, this is a reassuring sign 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.”
The strong jobs report drove a rally on Wall Street, with the Dow Jones Industrial Average adding 341.16 points, or 0.81%, to reach an all-time closing high of 42,352.75. The S&P 500 jumped 1.22% to 18,137.85, and the Nasdaq Composite rose 0.9% to 5,751.07. Megacap tech stocks and financials were among the top performers, with the S&P 500 energy sector posting its best week since October 2022, thanks to a surge in crude oil prices amid intensifying conflict in the Middle East.
Looking ahead, investors will be closely watching inflation data and minutes from the Federal Reserve’s September policy meeting in the upcoming week.
Us job market surpasses expectations
Rick Rieder, BlackRock’s chief investment officer of global fixed income, believes the Fed will move forward with small rate cuts in light of the strong jobs report.
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 cut increments, and not the near term 50 bps cuts the market had been pricing in,” Rieder said. Gina Bolvin, president of Bolvin Wealth Management, expressed optimism, 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.”
The latest job report offers a promising outlook for the US labor market, with hiring and wage growth remaining solid, aligning with other robust economic data.
This news is particularly encouraging for the Federal Reserve and the White House, as it suggests that the economy is more resilient than previously thought. The fresh data bolsters the notion that the economy is either headed for or has possibly already achieved a “soft landing,” where inflation decreases without causing significant economic hardship. This cohesive picture of economic strength is a welcome development as the country approaches the next election and navigates its economic future.
