Key takeaways
- The ADP jobs report only added 89,000 jobs to the private sector, falling far under the estimates
- Bond yields retreated from 16-year highs at the news, and the major stock indexes all added gains
- More unemployment and jobs data on Friday will help determine whether the Fed needs to cut interest rates or not
According to new data from the Labor Department, private payroll growth declined significantly in September, giving stocks some breathing room and sending bond yields retreating from multi-year highs. It’s the news the markets and the Fed needed, who will be considering whether the economy is still running too hot to keep inflation in check.
With bonds marching upwards and the stock markets suffering for the last two months, it’s still uncertain which way things are headed – but the economic outlook looked significantly less positive just 24 hours ago. This latest jobs report is the shot in the arm the markets needed – and may even convince the Fed that it’s time to start dropping interest rates.
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