The September jobs report added 1,34,000 new jobs but that failed to meet the expectation of the earlier estimates of 1,85,000 new jobs. As a result of which there is a shortage of workers and some part of it also got affected due to the possible effects of the hurricane Florence. The employment in leisure and hospitality which also includes the hotels and restaurants fell by 17,000 suggesting that the hurricane was a factor. Earlier Amazon announced that it will be raising its minimum wage rate to $15 an hour which is double that of the Federal mandate of $7.25. Though this was the sad part of the story.
A historic decline in Unemployment Rate:
The US jobless rate hits a 48-year low as it fell from 3.9% to 3.7%, the lowest level since December 1969, this news brought some cheer back into the US markets. But to make it clear the sudden decline in the unemployment rate did not come from a labor force shrinkage as it had happened in the past. The data release came at a time when the US economy is looking strong, which grew at a decent pace of 3.2 percent in the first half of the year.
How did the US markets react?
There were quite a few positive takeaways like the sudden decline in the unemployment rate and upward revision of jobs. Post which the 10-year Treasury yields rose to a seven-year high amid speculation the figures will clear the path for higher interest rates. After the jobs report came out last Friday the markets gained some points but after some time it could not resist the gain and dropped.
Industries that led the hiring:
The professional and business services led the jobs gain. Health Care, Transportation & Warehousing, Construction, and Manufacturing were the other industries which contributed to the job gain.
What It means:
As a result, the Fed may ignore the disappointing job numbers considering that unemployment has reached its lowest level in the past 48 years. So it will go ahead with its previous stance of increasing its key rate in December for the fourth time this year