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The US job market added just 29,000 jobs last month, well below the roughly 84,000–90,000 economists expected and a far cry from the 133,000 gained in August.
Who added jobs?
Well, virtually no one. Healthcare, which has led the job market in employment for two decades, even saw a dip:
It added just 17,000 jobs last month, far from its 33,000 average over the past year.
Construction gained 11,000 positions and manufacturing added 9,000.
Meanwhile, information and professional and business services fell by 10,000 and 9,000, respectively.
The slowdown isn’t thanks to firings: Weekly jobless claims have stayed close to multi-decade lows, and the unemployment rate only ticked up 0.1%. Economists say it’s mainly just because most employers simply aren’t hiring as much.
That’s good news for borrowing costs
Since the jobs numbers were so weak, the Federal Reserve has less reason to hike interest rates… again.
Before the report’s release, investors saw about a 70% chance of another Fed hike.
That probability has since dropped to roughly 20% as of writing (see current chances).
Why is that? A weak jobs report suggests the economy is slowing, which naturally takes pressure off inflation. Plus, raising interest rates would slow it even more, so the Fed will be less likely to hike.
/ Why does this matter? As hiring slows, finding work, switching jobs, or negotiating a raise could become more difficult. On the flip side, the weaker labor market may give the Federal Reserve less reason to raise rates again, which could prevent borrowing costs from climbing even higher.
