The probability of a Federal Reserve interest rate cut in December fell to 24% following unexpectedly strong U.S. nonfarm payroll data, according to figures compiled by Bloomberg.
Despite solid job creation in September, the U.S. unemployment rate climbed to 4.4%, reaching a level not seen since October 2021, the Labor Department reported Thursday. While employers added 119,000 jobs last month—far above economists’ estimates of 50,000 in a Reuters poll—August data were revised downward to reflect a loss of 4,000 positions, the second decline recorded this year. The higher jobless rate, up from 4.3% in August, was attributed to an expansion in the labor force as more Americans sought employment opportunities.
Separate Labor Department data indicated that layoffs remained subdued into mid-November, signaling a labor market that, while not accelerating, continued to show relative stability. The release of this month’s employment report had been postponed due to a 43-day federal government shutdown. Because of the shutdown—the longest on record—the Bureau of Labor Statistics canceled its usual October release, having been unable to collect household survey data. The agency announced that October figures will be combined with November’s numbers in a report expected December 16.
Sector performance in September was led by healthcare, which added 43,000 jobs, especially in ambulatory care and hospitals. Employment in restaurants and bars grew by 37,000, and social assistance jobs advanced by 14,000. In contrast, the transportation and warehousing industry shed 25,000 jobs.
Federal employment continued to contract, with payrolls declining by another 3,000 positions last month, bringing the cumulative loss for the year to 97,000. The Labor Department indicated this figure could escalate further as the impact from recent buyouts removes tens of thousands from government payrolls.
