U.S. Labor Market Surprises with September Rebound, Complicating Fed's Rate Decision

According to BlockBeats, the U.S. labor market showed an unexpected rebound in September, complicating the Federal Reserve's decision on whether to cut interest rates next month. The report, released on Thursday, revealed that non-farm payrolls increased by 119,000, surpassing economists' predictions of 50,000 and significantly higher than the revised August figure of 22,000. Meanwhile, the unemployment rate rose from 4.3% in August to 4.4%, marking the highest level since 2021. This report is the first economic health indicator released by the U.S. Bureau of Labor Statistics since the record-breaking federal government shutdown disrupted official data releases. The surprising data strengthens the position of hawkish members of the Federal Open Market Committee, who have consistently warned against premature rate cuts by the Federal Reserve. Following the data release, both U.S. Treasury yields and the dollar index declined. Despite U.S. President Donald Trump's ongoing pressure on the Federal Reserve to lower rates, there is a deepening divide within the central bank. One faction advocates for continued rate cuts at the December meeting to support the labor market, while another faction is concerned about potential inflation risks. The government shutdown has further complicated the Federal Reserve's decision-making process, as routine economic report releases were interrupted. The Bureau of Labor Statistics announced on Wednesday that due to halted data collection during the shutdown, the October employment report will not be released separately, with some data being incorporated into the November report.