Latest / Markets with Megan: A Quick Financial Markets Update / Unexpected Job Additions and the Economic Landscape Ahead | Episode 177 | 10-04-24

Transcript

Unexpected Job Additions and the Economic Landscape Ahead | Episode 177 | 10-04-24 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Well, that was a blockbuster jobs report that we got.
• 0:02
  Megan Horneman: Today.
• 0:03
  Megan Horneman: It is Friday, october the 4th, and this morning we received the September payroll report and what we saw was that the US economy added 254,000 jobs in the month of September and that was so much better than expectations.
• 0:18
  Megan Horneman: The expectations were for 150,000, and even higher than the economists who had the highest reading, which I believe was about $220,000.
• 0:28
  Megan Horneman: So it was a really good job.
• 0:29
  Megan Horneman: We also had a jobs report.
• 0:31
  Megan Horneman: We also had two months of net positive revisions of about $72,000.
• 0:36
  Megan Horneman: And when we go into the details, what we've seen is that the jobs that are still being created are in leisure and hospitality.
• 0:43
  Megan Horneman: So it's showing that consumers are still spending.
• 0:46
  Megan Horneman: There's need there for that leisure and hospitality, and then also in education and healthcare.
• 0:51
  Megan Horneman: The other big surprise was the household employment change.
• 0:55
  Megan Horneman: So the household survey.
• 0:56
  Megan Horneman: We saw 430,000 additional increase in the household employment survey.
• 1:02
  Megan Horneman: That's the best that we've seen since March and that's the indicator that is how we dictate the unemployment rate.
• 1:08
  Megan Horneman: So the unemployment rate ticked a 10th lower to 4.1.
• 1:12
  Megan Horneman: But actually when you go out a couple of basis points, it was 4.05.
• 1:15
  Megan Horneman: So that's been the second consecutive month we've seen the unemployment rate coming lower.
• 1:22
  Megan Horneman: The other things in this report that we look at is the average hourly earnings, and we saw those tick up four-tenths.
• 1:29
  Megan Horneman: So on a year-over-year basis, earnings were growing 4% and then when you look at the labor force participation rate, that stayed steady at 62.7%.
• 1:38
  Megan Horneman: All around, this was a really solid report and it's amazing because typically September is the second worst month of the year as far as job creation.
• 1:47
  Megan Horneman: But it was a very, very strong report here from the labor market and a lot of questions about what does that mean for the Federal Reserve.
• 1:54
  Megan Horneman: We think that the Federal Reserve is.
• 1:57
  Megan Horneman: There's a lot of speakers next week.
• 1:58
  Megan Horneman: We'll all get one more employment report before their next meeting.
• 2:01
  Megan Horneman: I think they're still on pace to probably cut interest rates, but I think those people expecting a 50 basis point rate cut can kind of price that out right now after this employment report.
• 2:12
  Megan Horneman: Not only was the employment report strong, but remember that average hourly earnings is an inflationary indicator, so it's something that they have to keep an eye on.
• 2:20
  Megan Horneman: The other thing is, when we go into the next month in October, some of the layoffs we've heard in companies like Boeing these aren't reported in here, so we might get some volatility around the numbers in the future months as that's being reported.
• 2:34
  Megan Horneman: That's all we have today.
• 2:35
  Megan Horneman: If you like this, please hit that subscribe button, hit the alarm bell, share this with friends or colleagues, and if you'd like the history or more podcasts, you can go to marketswithmegan dot fm.
• 2:46
  Megan Horneman: Thank you,