:max_bytes(150000):strip_icc()/GettyImages-2233901408-98c89304cc29467b99f264c29b0a241d.jpg "What To Expect From the September Jobs Report This Week")
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Key Takeaways
- The highly anticipated September employment report, due to be released Friday, is expected to show that U.S. employers added 45,000 jobs in September, up from 22,000 in August according to forecasts.
- The report from the Bureau of Labor Statistics, which could be delayed if there is a government shutdown, is expected to shed light on whether the job market’s summer downturn was a blip or the beginning of a serious trend.
- Employment numbers that come in below expectations could push the Federal Reserve to accelerate their pace of interest-rate cuts, while higher-than-anticipated job growth could take the pressure off the central bank for rate cuts.
Forecasters say the job market likely bounced back in September, but we many not know for sure for some time: a government shutdown could delay Friday’s crucial report on hiring.
The report from the Bureau of Labor Statistics is expected to show the U.S. economy added 45,000 jobs in September, up from 22,000 in August, while the unemployment rate stayed unchanged at 4.3%, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. However, the report could be delayed by at least a few weeks, as the federal government is on track to shut down due to an impasse between Democratic and Republican lawmakers over healthcare funding.
The report, whenever it’s released, will shed light on how well the job market is holding up after a sharp hiring slowdown during the summer amid uncertainty about the impact of tariffs, resulting in the economy losing jobs for the first time since 2020 in June. The pullback in hiring, in addition to a steep downward revision to job growth statistics for 2024 and early 2025, has raised concerns that the stable yet stagnant job market could take a turn for the worse in the coming months.
How This Could Affect Your Finances
Friday’s report could have more of an impact on financial markets than usual. Some economists believe the job market is settling into a “new normal” of lower job growth than years past, which raises the chances of any given month showing weak job growth and spurring an overreaction from the stock market. The jobs report also factors heavily into the Federal Reserve’s decisions on interest rates.
Some economists expect the job market to stabilize after turmoil over the summer.
“In our view though, the recent weakness is largely just a one-time correction, rather than the start of a worsening momentum slowdown,” economists at Nomura led by chief developed market economist David Seif wrote in a commentary.
The addition of 45,000 jobs would be low by historical standards, but could be enough to keep the unemployment rate from rising, economists said, since President Donald Trump’s crackdown on immigration has reduced the number of job seekers.
The Impact on the Fed’s Next Rate Decision
The hiring report could heavily influence policymakers at the Federal Reserve who are deciding when and how much to lower the central bank’s key interest rate in the coming months.
Fed officials cut the fed funds rate by a quarter-point in September and are widely expected to do so again in October to lower borrowing costs on many kinds of loans and boost the job market.
Job growth above expectations could reduce the pressure on the Fed to cut rates further, while another disappointing report could sway them to accelerate the pace of rate cuts.
How Financial Markets Could React
This and future jobs reports could cause financial markets to move more than usual, Jim Reid, head of macro and thematic research at Deutsche Bank, wrote in a commentary.
“In my opinion, we could be set for some notable volatility around these prints going forward,” Reid wrote.
Reid noted the “breakeven” rate of job growth—that is, the number of jobs the economy must add to avoid the unemployment rate rising—is now about 50,000 a month because of the immigration slowdown. In comparison, that figure has been around 100,000 in years past. The lower “new normal” makes negative job growth more likely in any given month, potentially leading markets to overreact.
“Given the breakeven rate has always been higher in our careers, we are not really conditioned to negative prints being within the margin of error, so reactions to such prints may be not be rational if and when they happen,” Reid wrote.
