US stocks and bonds rose on Friday after a weaker-than-expected September jobs report reduced market expectations of another Federal Reserve interest-rate increase this month.
The US economy added 29,000 jobs in September, well below the 90,000 forecast by economists. August’s payroll increase was also revised down to 133,000 from 162,000, while the unemployment rate rose to 4.2% from 4.1%.
The figures pushed Treasury yields lower as investors reassessed the outlook for monetary policy. The two-year Treasury yield fell three basis points to 4.758%, while the 10-year yield declined to 5.205%.
US stocks also opened higher, with the S&P 500 gaining 0.9% and the Nasdaq Composite rising 1.2%. The dollar weakened slightly, while gold prices climbed 0.8%.
Market pricing showed the probability of a Federal Reserve rate increase at its October 27-28 meeting falling to about one in six after the jobs report, although inflation remains above the central bank’s 2% target.
Economists also cautioned that seasonal factors linked to the late timing of the Labor Day holiday may have contributed to the unusually weak payroll figure. There has been no broad increase in layoffs, with unemployment claims remaining low.
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