The U.S. jobs market exceeded economists’ expectations last month as the economy added 254,000 jobs, with annual wages up 4% and unemployment edging down to 4.1%, the Bureau of Labor Statistics (BLS) reported on Friday (Oct. 4).
Analysts had projected 140,000 to 150,000 jobs would be added and the unemployment rate would remain unchanged at 4.2%.
Good News for Inflation
“This was a very encouraging payroll report, with job growth handily beating expectations,” Sonu Varghese, Global Macro Strategist at Carson Group, wrote in an analyst note, per the Washington Post.
“The fact that inflation is easing at the same time means productivity growth is strong, and that should keep the Fed on track for more rate cuts — an added tailwind for the economy and markets,” Varghese added.
What it Could Mean for Interest Rates
The extra healthy jobs report for September could mean that the Federal Reserve’s considered interest rate cut next month may not have to be as big as originally pondered.
The Federal Reserve cut rates by half a point in September, with the end goal being to reel in runaway inflation. Inflation did slow from a high of 9% in 2022 but it is still above the Fed’s 2% target.
“A soft landing is in sight,” Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, told ABC News in a statement. “The bottom line here is that a resilient labor market is continuing to support consumers and the Fed is cutting rates.”