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U.S. Economy Added 136K Jobs; Nervous Market Reassured

Investing.com - The September jobs report revealed some cracks in the labor market Friday, but overall the market considered the numbers to be pretty solid.

S&P 500 Futures were higher as nonfarm payrolls came about in line with forecasts with a gain of 136,000 versus expectations of 140,000. And the jobless rate fell to 3.5%.

Stock index futures rose after the report on relief after a week of miserable economic indicators, as much as anything else.

The report is “not weak enough to support the hypothesis of rapidly spreading economy-wide weakness ... but also not confirming that the domestic sector is immune from global pressure,” Allianz (DE:ALVG) Chief Economic Adviser Mohamed El-Erian tweeted.

The one outlier was wage growth, which was flat for last month. Year-over-year annual wage growth dropped to 2.9% from 3.2%.

That would usually be a boon those championing aggressive easing by the Federal Reserve, with no sign of wage inflation. But the chances of a rate cut this month actually dropped to 80.2% immediately after the report, according to Investing.com’s Fed Rate Monitor Tool.

One reason is certainly that an economy that is steadily adding jobs in the face of a lot of global economic headwinds doesn’t need a helping hand from lower rates just yet.

There is also the outlier in President Donald Trump.

Trump today tweeted touting the unemployment rate hitting a 50-year low. That may take some pressure of Fed Chairman Jerome Powell, who has been a target of Trump’s ire for not cutting rates to zero when the data looks negative and equities sell off.

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