Jobs data anticipated but will it be nudge the Fed needs to cut again?

The latest barometer of the strength of the US economy drops this morning (Oct. 4) as the Bureau of Labor Statistics publishes its jobs report for September, stats which will help inform the Fed’s next rates decision in November.

The markets are expecting the data to show resilience rather than significant growth having seen some bumpiness over the summer with July’s revised 89,000 total providing a shock, quelled somewhat by August’s better-than-expected 142,000.

Economists predict that September will maintain the status quo with around 140,000 jobs and unemployment at 4.2%.

Wealth managers have been discussing their hiring needs with InvestmentNews this week.

A report from ADP earlier this week stated that there were 143,000 jobs created in the private sector in September, reflecting a rebound from a five-month slowdown. Although the information sector lost 10,000 jobs, other major sectors all gained including manufacturing which added 2,000, its first gain since April.

The independent data based on actual payroll data of 25 million US employees also revealed that annual pay for private sector workers was up 4.7% year-over-year for those remaining in their role while those changing jobs saw 6.6% on average.

"Stronger hiring didn't require stronger pay growth last month," said Nela Richardson, chief economist, ADP. "Typically, workers who change jobs see faster pay growth. But their premium over job-stayers shrank to 1.9%, matching a low we last saw in January."

Corporate America is expecting wage bills to be higher in 2025, with budgets rising by a record amount according to a new report from The Conference Board.

An analysis of job cuts by Challenger, Gray, and Christmas found that US-based employers announced 72,821 cuts in September, a 4% decrease from the prior month. Third quarter job cut announcements were down 16% quarter-over-quarter to 174,597.

The firm’s senior VP, Andrew Challenger, said we’re at an inflection point where the labor market could stall or tighten.

“It will take a few months for the drop in interest rates to impact employer costs, as well as consumer savings accounts. Consumer spending is projected to increase, which may lead to more demand for workers in consumer-facing sectors,” he said. “Layoff announcements have risen over last year, and job openings are flat. Seasonal employers seem optimistic about the holiday shopping season. That said, many of those who found themselves laid off this year from high-wage, high-skill roles, will not likely fill seasonal positions.”

The official Bureau of Labor Statistics jobs report is due at 8.30am ET on October 4. The Fed will announce its rates decision on November 7.