Wall Street Focus Shifts Back to U.S. Economy After Nonfarm Payrolls Surge In September

Barry Adams
04 Oct, 2024
New York City

U.S. stocks advanced in early trading on Friday after nonfarm payrolls in September rose sharply, surpassing market expectations. 

The S&P 500 index gained 0.6% and the Nasdaq Composite advanced more than 1% after the strong jobs report shifted attention back to the U.S. economy. 

After weeks of rising tensions in the Middle East, investors have been on the defensive, and the strike by dockworkers added to the market gloom at the start of October. 

However, strong job gains in September reinforced the view that the labor market is resilient despite the elevated interest rates and high cost of living. 

The unemployment rate edged lower to 4.1%, but wages are still rising at 4.0%, inconsistent with the Fed's inflation rate of 2%. 

 

Nonfarm Payrolls Expanded at the Fastest Pace in Six Months

The U.S. economy added 254,000 jobs in September from the upwardly revised 159,000 in August, the U.S. Bureau of Labor Statistics said in its monthly report. 

Job additions in September were the strongest in the last six months and higher than the average over the prior 12 months. 

Employment in food services and drinking places increased by 69,000, in healthcare by 45,000, in government by 31,000, and in social assistance by 27,000. 

Employment changed little in financial activities, professional and business services, and transportation and warehousing. 

In September, average hourly earnings for all employees on private nonfarm payrolls increased by 13 cents, or 0.4%, to $35.36, and average hourly earnings increased by 4.0% over the last 12 months.

The change in total nonfarm payroll employment for July was revised up by 55,000 to 144,000, and the change for August was revised up by 17,000 to 159,000.

With these revisions, employment in July and August combined is 72,000 higher than previously reported.

The unemployment rate increased to 4.1% from 3.8% a year ago, and the number of unemployed people rose to 6.8 million from 6.3 million, respectively. 

Both the jobless rate and the number of unemployed people were changed little in September. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.7% to 5,739.55, the Nasdaq Composite rose 1.1% to 18,109.96, and the Russell 2000 index fell 0.6% to 2,180.55. 

The yield on 2-year Treasury notes edged higher to 3.88%, 10-year Treasury notes inched up to 3.97%, and 30-year Treasury bonds inched higher to 4.27%.

WTI crude oil increased $0.97 to $74.68 a barrel, and natural gas prices edged up 2 cents to $2.99 a thermal unit.

Gold rose by $1.85 to $2,657.45 an ounce, and silver increased by $0.09 to $32.13.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.86.

 

U.S. Stock Movers

ZIM Integrated Shipping Services Ltd. plunged 11.4% to $19.21 after the port workers' union called off its strike following a tentative agreement. 

The news weighed on other shipping companies in Europe and Japan, and Denmark-based A P Moeller-Maersk dropped more than 8%, Hapag Lloyd plunged 13%, and Nippon Yusen and Mitsui O.S.K. Lines declined more than 9%. 

Rivian Automobile declined 6.8% to $10.04 after the luxury electric vehicle maker trimmed its annual production outlook. 

The company estimated its annual production to range between 47,000 and 49,000, lower than its previous guidance of 57,000. 

The company blamed the production revision on a shortage of key components. 

Spirit Airlines plunged 32% to $1.52 after a Wall Street Journal report said that the company is considering filing for bankruptcy protection from its lenders.