US Labor Market Shows Signs of Weakness as Job Creation Falls Short

The US labor market showed signs of weakness in September as employers added far fewer jobs than expected. The economy created only 29,000 new positions, falling short of the predicted 84,000 increase by a wide margin.

This underperformance led to an uptick in the unemployment rate, which rose from 4.1% to 4.2%. Despite this, the labor force participation rate increased slightly to 61.8%, a relatively small gain given the larger-than-expected job losses.

The release of the employment data also included significant downward revisions to previous months' numbers. July's initial payroll growth of 21,000 was revised down to a loss of 10,000 jobs, while August's increase of 162,000 was reduced to 133,000. This combination of poor current and revised past performance led economists to reassess their expectations for the Federal Reserve's next move.

A stronger dollar and higher Treasury yields weighed on gold prices, pushing them down by 0.75% to $4,146.54 an ounce. The non-yielding metal was also affected by investors' continued assessment of whether the Fed would maintain a hawkish stance or pivot towards easing policy. Silver and other precious metals followed suit, with spot silver falling 0.8%, platinum declining 2%, and palladium losing 0.5%.