Notes From the Desk – US September Employment – Strong Like Bull
The unambiguously strong September US jobs report dented the summer narrative of weakness in the labour market.
The numbers:
- 254k jobs created (140k expected).
- Unemployment rate falls to 4.1% (4.2% expected).
- YoY wage growth of 4% (3.9% expected).
- Previous two months job growth was revised higher by 72k.
The implications:
While there is still one more job report before their next meeting, today’s data significantly reduces the odds of another ‘jumbo’ (50 bps) cut from the Fed. This has pushed yields up 10-15 bps.
Interestingly, despite the rate cuts, US and Canadian 10y yields are now higher on the year. We warned investors of this potential, as we were skeptical of value in the long end of the curve.
