U.S. gains 263,000 jobs in September, above expectations

Yahoo Finance Live’s Julie Hyman, Brian Sozzi, and Brad Smith break down September jobs report data.

Video transcript

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JULIE HYMAN: We're just about 15 seconds away from the numbers right now, again, looking for a headline number of 255,000 jobs being added to the US economy, unemployment rate 3.7%, and a year-over-year gain in wages of 5.0%, this as we see markets mixed ahead of these numbers that we're waiting for to come through right now. 263,000, 263,000 is the number that we got for the month of September. So obviously, that is higher than estimated, higher than the 255,000. The unemployment rate dropping, actually, to 3 and 1/2 percent, versus the 3.7% that was estimated, and versus the 3.7% that we saw in August.

And then getting to those average hourly earnings. Those coming in right in line with estimates, 0.3% month-over-month gain, and a 5.0% year-over-year gain. Average weekly hours for all employees remaining unchanged at 34 and 1/2 percent. And the participation rate ticking down, not up, to 62.3% from 62.4%, really interesting report here. And nothing in here that I can see, guys, Brad, to dissuade the Fed from its path.

BRAD SMITH: Yeah, that is indeed correct here. And diving into some of the sectors as well, that's all the largest monthly job growth. It's important to note-- and to your point, you brought this up the data drop-- monthly job growth has averaged 420,000 thus far in 2022. You compare that with 562,000 per month during 2021.

However, in this most recent report, this most recent month, notable job gains, they occurred in leisure and hospitality and in health care leisure, hospitality. That added 83,000 jobs in September. It's kind of in line with the average monthly job gain over the first eight months of the year. And then, additionally within employment in food and services or food services and drinking places. That rose by 60,000 during the month of September. Also, here, it's important to still note that leisure and hospitality is below its pre-pandemic February 2020 level by about 1.1 million, or about 6.7%, as the BLS less laid out in these statistics as well, Brian.

BRIAN SOZZI: Yeah, I kept hitting refresh. I was wondering if this was the right report. I was looking at the right thing, so above expectations, like you guys mentioned. This was a really strong report. And I'm not surprised to see those futures tick down. Like we mentioned just before the report hit, this is a market set up to reward any news of slowing growth in the economy or misses to the downside in some of its economic data.

But the only real weakness that we have in this report-- and we're still going through it-- is the number of part time workers fell 306,000. That, to me, is a little bit of a red flag, especially ahead of the holiday season. But again, these job gains were broad-based, leisure and hospitality up 83,000. Employment in professional business services, usually, I think, one of those first areas of jobs to get cut as growth slows, that was up 46,000. This was a strong report. And I really do think it's going to feed that bear thesis on stocks here.

BRAD SMITH: Yeah, we're seeing the immediate reaction here as well right now. The Dow futures are down, and it looked like by about triple digits a moment ago. Taking a look at the major averages here in the US, you've got the Dow down 123 points, 4/10 of a percent. The S&P 500 futures also down by about 7/10 of a percent. The NASDAQ futures down, now, more than 1%, 1.1%, in the red.

Just for context, we had seen mixed activity coming into the report actually dropping. And, as of right now, the Dow pivoting from positive territory into negative territory, at this point in time. There's even more to kind of glean through here. Manufacturing, particularly, was one area that I was looking at here. That continued to trend up in September. That was up by about 22,000 jobs, particularly in motor vehicles and parts, up 8,000 there, fabricated medical products.

We had heard a lot on the materials side in terms of some of the forecasts that had come out from companies around where their demand was. So it was gonna be interesting to track particularly that portion of the broader manufacturing but construction and also materials kind of landscape, or materials touching landscape as well.

And then, you think about some of the declines that we had seen. In m employment in financial activities, that actually changed a little, but it moved lower by about 8,000 jobs. And declines in insurance carriers, related activities, that was down by about 9,000, as of right now here. So let's check in on how the futures are reacting continuously here to this data. We've got Yahoo Finance's own Ines Ferre. You've been going through the YFi Interactive--

INES FERRE: Yeah.

BRAD SMITH: --really picking through some of the major charts we're watching.

INES FERRE: Yeah. And quite a bit of reaction of what we've seen, basically the market's thinking this is a hot labor report. And so the Fed will continue hiking. So we are seeing futures reacting to that. Take a look right here. The S&P had been in the green in premarket. And then it plunged down to 0.9%. Now it's down 0.6%, but nevertheless, quite a large move. You've got the NASDAQ 100, that's down 1% right now. And also, the Dow futures, those are lower. Those had been positive in premarket, and now giving back some of that.

Taking a look, also, at the 10-year Treasury Futures. Now, this moves inversely with yields. So you can see here, yields going higher. And then also looking at where we're at with Bitcoin as investors are leaving risk assets. Take a look here. Here's Bitcoin going lower.

And also, the US Dollar Index, we've been watching the US Dollar Index. This is against a basket of other currencies, not quite a lot of movement there. But I'm just looking at the Euro versus the US dollar. We're seeing a downward movement there. And also, the US Dollar versus the Japanese yen, and upward movement here. So again, these movements are sharp. And sometimes they can be a bit of a head fake. So we'll have to see where we continue from here, guys.