September jobs report: +29,000 payrolls vs ~84k expected, unemployment up to 4.2%; October Fed-hike odds fall to ~28%, 10Y yield to ~5.16%

What happened

The U.S. added just 29,000 nonfarm jobs in September, far below the ~84,000 economists expected, and the unemployment rate ticked up to 4.2% from 4.1%, its first rise in seven months. The private sector added 46,000 jobs while government payrolls shrank, and July and August gains were revised down by a combined 60,000 (August now 133,000). Notably, half a million people entered the labor force in September, which drove the jobless rate higher even in a 'low-hire, low-fire' market. Stock-index futures rallied after the release — Dow +0.9%, S&P 500 +0.8%, Nasdaq 100 +1% — while the 2-year yield fell to ~4.7% and the 10-year to ~5.16%, down from a fresh 24-year high of ~5.35% early Thursday.

Who’s affected

• Broad U.S. equities (S&P 500, Nasdaq, Dow): weaker hiring reduces the odds of an October hike, easing the bond selloff that has pressured valuations
• Treasury market: yields fall across the curve (10Y ~5.16%, 2Y ~4.7%), relief after a 24-year yield high
• Rate-sensitive sectors (utilities, real estate, small caps): benefit from lower yields; homebuilders get breathing room as mortgage rates pushed above 7%
• Growth/tech: higher-duration earnings benefit from lower discount rates

Sources

wsj.combarrons.comnypost.cominvestors.cominvestopedia.com