US Economy Weakens Job Growth Slows Rate Hike Likely Pushed to December

The outlook for the US economy has shifted dramatically in just one month. In early September, the August jobs report showed a solid gain of 162,000 payrolls, and the Atlanta Fed’s “GDP Now” model was forecasting annual GDP growth exceeding 5% for the third quarter. However, the Labor Department’s September report revealed a much weaker jobs market, with only 29,000 payrolls added, and downward revisions for prior months. This abrupt change serves as a reminder to investors not to overreact to short-term data.

The revised figures suggest a slowing economy, which may prompt the Federal Reserve to defer a rate hike until December. Meanwhile, other central banks are also in focus. Bank of Japan Governor Kazuo Ueda addressed the National Securities Convention in Tokyo, with traders watching for signals on potential further rate hikes. The Bank of England is also under scrutiny as renewed bets of a November rate hike have strengthened the British pound against some currencies.

Elsewhere, economic challenges persist. Australian consumers are grappling with a persistent cost-of-living crisis, with sentiment at its lowest in decades. The latest sentiment index is among the worst since the survey began in the early 1970s, highlighting ongoing financial strain.