US employers added 254,000 jobs in September, significantly exceeding economists' expectations. The unemployment rate also fell to 4.1%. Market experts argue that the robust data undermines the Federal Reserve's recent decision for a large interest rate cut.
Nonfarm payrolls data out last Friday showed employers added 254,000 jobs in September, well beyond economists' expected 150,000. The unemployment rate, meanwhile, fell to 4.1%, down 0.1 percentage point.
There is no case for more 50-basis-point rate cuts by the Federal Reserve, veteran market strategists told CNBC, saying the latest U.S. jobs data implies the central bank might have acted in haste.Nonfarm payrolls data out last Friday "The second thing it does is to give you the impression that the Fed will cut rates successively to a level which is much lower than it actually will achieve. Fed rates will not go below 4% or 3.5%, and the reason for that is the economy is so robust that firms earn enough money without needing a lower interest rate."
Trader expectations of a large interest rate cut in November have fallen off a cliff following last week's data. When the Federal Open Market Committee chose last month to lower its federal funds rate by 50 basis points it was — barring emergency rate reductions during the Covid pandemic — the first time it had done so since the global financial crisis in 2008. The FOMC also indicated throughBob Parker, senior advisor at the International Capital Markets Association, agreed with Roche that the"case for the Fed to cut aggressively just isn't there at all.
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