What Happened, Latest NFP Data Destroy Market Hopes?

<p>&nbsp;The United States economy added 336,000 jobs in September, pointing to concerns that the labor market is not growing as slowly as the Federal Reserve wants in its efforts to control inflation.</p><p><br /></p><p>Economists interviewed by Bloomberg had expected nonfarm payrolls to increase by 170,000 in September.</p><p><br /></p><p>The unemployment rate in September was 3.8%, in line with the figure from August.</p><p><br /></p><p>Here is a summary of the employment data:</p><p><br /></p><p>NFP data: 336,000 versus an increase of 170,000 (estimated)</p><p><br /></p><p>Unemployment rate: 3.8% versus 3.7% (estimated)</p><p><br /></p><p>Average hourly earnings, monthly: 0.2% vs. +0.3%</p><p><br /></p><p><br /></p><p>Average hourly earnings, annualized: +4.2% vs. +4.3%</p><p><br /></p><p>Average hours worked per week: 34.4 in line with the estimated reading of 34.4</p><p><br /></p><p>The labor market has been a key factor in the Federal Reserve's assessment of the economy, which remains a focus ahead of the central bank's policy meeting on November 1.</p><p><br /></p><p>On Sept. 20, Fed Chairman Jerome Powell noted that there would still need to be a "slight slowdown" in the labor market to keep inflation to the Fed's 2% target. If that does not continue, Powell has warned that this could prompt the Fed to raise interest rates again.</p><p><br /></p><p>On the other hand, other labor market data leading up to the report showed some signs of a slowing labor market.</p><p><br /></p><p>The ADP National Employment Report showed 89,000 private sector jobs were added to the US economy in September. Economists had expected a job addition of 150,000 for the month.</p><p><br /></p><p>On Tuesday, the latest JOLTS data showed that there were 9.6 million jobs offered at the end of August, an increase from 8.92 million jobs offered in July and the highest reading since May.</p><p><br /></p><p>Markets are expecting about an 80% probability that the Fed will not raise interest rates at its next meeting, based on the CME FedWatch Tool.</p>