TheStreet
The U.S. economy created a far higher-than-expected new jobs last month, official data indicated Friday, as the labor market continues to outperform forecasts and stock inflation concerns.
The Labor Department’s Bureau of Labor Statistics said 336,000 new jobs were created last month, well ahead of the Wall Street consensus forecast of a 170,000 gain and the second largest gain of the year.
Private-payroll gains were pegged at 263,000, the BLS said, although the unemployment rate held at 3.8%, just ahead of the 1969 low of 3.4% recorded earlier this year and the 3.8% figure published in August.
The BLS also revised its August jobs-addition estimate lower, to 227,000 from its original estimate of a 187,000 net gain. It also boosted its July estimate to 236,000 from its prior estimate of 157,000.
The BLS noted that hourly wages were up 0.2% on the month – compared with the 0.2% gain recorded in August and Wall Street’s consensus forecast for a 0.3% gain. On an annual basis, wages were up 4.2%, again shy of Wall Street’s 4.3% forecast.
U.S. stocks were sharply lower following the data release, with futures contracts tied to the Dow Jones Industrial Average indicating a 200 point opening bell decline and those linked to the S&P 500 suggesting a 33 point advance. Futures tied to the tech-focused Nasdaq were down 140 points.
Benchmark 10-year Treasury note yields surged 9 basis points from overnight levels to 4.839%, the highest since 2007, while 2-year notes leapt to 5.138%.
The CME Group’s FedWatch now indicates an 23.7% chance of a 25-basis-point (0.25 percentage point) hike next month month, up from 19% at the close of trading last night. Bets on another rate hike in December accelerated to around 37%.
Job market data this week has been mixed, with ADP’s monthly National Employment Report showing a decline in private sector hiring and muted wage gains for job leavers, while the BLS’s weekly estimate of Americans filings new applications for jobless benefits holding near the lowest levels in 8 months.
Other reports, including Challenger Gray & Christmas’ monthly tally of overall job cuts, showed September layoffs fell 37% from August to 75,151, taking the third quarter total to around 146,300.
“Employers are grappling with inflation, rate increases, labor issues and consumer demand as we enter Q4,” said Andrew Challenger, labor expert and Senior Vice President of Challenger, Gray & Christmas, Inc.
Labor demand, however, remained robust over the month of August, according to the BLS’s monthly Job Openings and Labor Turnover Survey, better known as JOLTS, which showed unfilled positions surging to a much higher-than-expected total of 9.6 million.
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