Soft US Jobs Report Supports Fed Rate Pause

The US jobs report for September fell short of expectations on all three key metrics. Non-farm payrolls rose by only +29k, well below the forecasted +90k. This downward revision is significant, with 60k of adjustments to previous months' numbers.

The unemployment rate also ticked up to 4.2% from 4.1%, driven in part by a partial recovery in the participation rate. Meanwhile, wage growth remained at 3% year-on-year, failing to meet the consensus forecast of 3.1%. This suggests that there is no inflation threat emanating from the jobs market.

This development aligns with recent comments from Federal Reserve officials John Williams and Philip Jefferson, suggesting they may need more time before making any interest rate decisions.