US Jobs Data Sinks Expectations for Fed Rate Hike This Month

The US jobs data released on Friday showed softer-than-forecast numbers, which led to a decline in expectations for an interest rate hike from the Federal Reserve later this month. Nonfarm payrolls increased by 29,000 jobs last month after a downwardly revised 133,000 rise in August.

Economists polled by Reuters had forecast payrolls advancing 90,000. Bets on a second rate rise from the Fed this month faded after the data, with traders now seeing a roughly 21% chance that the Fed will hike rates by 25 basis points in October, compared to about 26% before the report.

Joseph Purtell, senior vice president, portfolio manager and rates trader at Neuberger, said, 'It wasn't as hot a labor market print as August was.' He added that 'we broadly categorize this labor market as stable,' but noted that the report does not change that view. Expectations for an October rate hike had already been declining going into Friday's jobs report.

Two top policymakers said this week they wanted more data before deciding what to do next with interest rates. The Nasdaq hit a record high early and was last up more than 1%. Lower oil prices added to bullish sentiment in stocks.