Employment Data Pressures Futures
STOCK INDEX FUTURES
Stock index futures quickly declined when the September employment data were released.
The U.S. Bureau of Labor Statistics reported nonfarm payrolls in September increased 336,000 when up 160,000 was expected.
Private payrolls were up 263,000 when a gain of 150,000 was anticipated.
Manufacturing payrolls were up 17,000 when up 5,000 was predicted.
The unemployment rate was 3.8% when 3.7% was estimated.
Average hourly earnings increased 0.2% when a gain of 0.3% was forecast and the average workweek was 34.4 hours as expected.
Today’s increase in nonfarm payrolls was surprising, especially since on Wednesday the Automated Data Processing, Inc. employment report showed an increase of only 89,000 when up 150,000 was expected.
The 2:00 central time consumer credit report for August is anticipated to show an $11.5 billion increase.
INTEREST RATE MARKET FUTURES
This morning’s employment data pressured futures.
Christopher Waller of the Federal Reserve will speak.
The Federal Reserve’s target range for the fed funds rate is 5.25% to 5.50%. Financial futures markets are predicting there is a 71% probability that the Federal Open Market Committee will keep its fed funds rate unchanged and a 29% probability of a 25 basis point increase at its November 1 policy meeting.
This morning’s employment data supported the U.S. dollar and pressured other currencies.
The U.S. dollar peaked on October 3 when there were reports that the Bank of Japan intervened in foreign exchange markets to support the yen by selling U.S. dollars and buying yen.
Factory orders in Germany increased 3.9% month-to-month in August 2023, rebounding from an 11.3% decline in July, and beating estimates of a 1.8% increase.
The Halifax House Price Index in the U.K. declined 4.7% year-over-year in September 2023, following a slightly revised 4.5% drop in August. This was the largest decrease in house prices since August 2009.
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