Markets with Megan

September's astonishing jobs report defied all expectations with a staggering 254,000 new jobs added to the U.S. economy. The sectors of leisure, hospitality, education, and healthcare are leading this surge, showcasing robust consumer spending and economic vitality. Unravel the household employment changes and their pivotal role in nudging down the unemployment rate for the second month in a row. Plus, discover how average hourly earnings reflect a healthy 4% year-over-year growth, providing a clear snapshot of the labor market's current strength and its broader economic significance.

With these employment figures on the table, Megan explores what this means for the Federal Reserve's looming decisions on interest rates. Will the anticipated 50 basis point rate cut remain on the cards, or is a rethink warranted? We also touch on potential future volatility, as layoffs from major companies like Boeing have yet to make their impact felt, hinting at twists in upcoming reports. This episode promises a comprehensive understanding of the current financial landscape and its implications for the economy. Share this insightful analysis with anyone keen on staying ahead in economic trends.

Well, that was a blockbuster jobs report that we got. Today. It is Friday, october the 4th, and this morning we received the September payroll report and what we saw was that the US economy added 254,000 jobs in the month of September and that was so much better than expectations. The expectations were for 150,000, and even higher than the economists who had the highest reading, which I believe was about $220,000. So it was a really good job. We also had a jobs report. We also had two months of net positive revisions of about $72,000.

And when we go into the details, what we've seen is that the jobs that are still being created are in leisure and hospitality. So it's showing that consumers are still spending. There's need there for that leisure and hospitality, and then also in education and healthcare. The other big surprise was the household employment change. So the household survey. We saw 430,000 additional increase in the household employment survey. That's the best that we've seen since March and that's the indicator that is how we dictate the unemployment rate. So the unemployment rate ticked a 10th lower to 4.1. But actually when you go out a couple of basis points, it was 4.05. So that's been the second consecutive month we've seen the unemployment rate coming lower.

The other things in this report that we look at is the average hourly earnings, and we saw those tick up four-tenths. So on a year-over-year basis, earnings were growing 4% and then when you look at the labor force participation rate, that stayed steady at 62.7%. All around, this was a really solid report and it's amazing because typically September is the second worst month of the year as far as job creation. But it was a very, very strong report here from the labor market and a lot of questions about what does that mean for the Federal Reserve. We think that the Federal Reserve is.

There's a lot of speakers next week. We'll all get one more employment report before their next meeting. I think they're still on pace to probably cut interest rates, but I think those people expecting a 50 basis point rate cut can kind of price that out right now after this employment report. Not only was the employment report strong, but remember that average hourly earnings is an inflationary indicator, so it's something that they have to keep an eye on. The other thing is, when we go into the next month in October, some of the layoffs we've heard in companies like Boeing these aren't reported in here, so we might get some volatility around the numbers in the future months as that's being reported. That's all we have today. If you like this, please hit that subscribe button, hit the alarm bell, share this with friends or colleagues, and if you'd like the history or more podcasts, you can go to marketswithmegan dot fm. Thank you,