Job Numbers Impress
The U.S. economy added 254,000 jobs in September, significantly exceeding the 150,000 forecast, while the unemployment rate dropped to 4.1%. Job creation was strong across sectors like hospitality, health care, and government, with wage growth also surpassing expectations, rising 0.4% for the month and 4% year-over-year. The labor market's strength, with upward revisions from previous months, points to continued economic health and likely encourages the Federal Reserve to take a more gradual approach to interest rate cuts. Market reactions were positive, with stock futures rising and increased chances of consecutive quarter-point rate cuts by the Fed through the end of the year.
Private Payroll Rises
Private sector hiring picked up in September, with companies adding 143,000 jobs, exceeding economists' forecasts and showing labor market resilience. Pay growth continued to slow, with a 12- month gain of 4.7% for those staying in jobs and 6.6% for job switchers, down from August. Job gains were led by leisure and hospitality, while information services was the only sector to see a decline. The Federal Reserve is closely watching labor data as it considers future rate cuts, with expectations for a quarter-point reduction in November and a larger move in December.
Port Strike Ends
A tentative agreement on wages was reached between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), ending a strike that had disrupted East and Gulf Coast ports. The agreement extends the current contract through January 15, 2025, allowing time to negotiate unresolved issues, particularly around port automation. The strike had caused significant supply chain disruptions, with thousands of containers stranded at sea and shipping costs rising, but port operations are expected to return to normal within a few weeks. While wage increases of 61.5% over six years are part of the deal, automation remains a key point of contention as both sides work towards a final agreement to avoid another strike.
