US September payrolls rise just 29,000, below forecast; unemployment up to 4.2%

BLS reported that US nonfarm payrolls rose by 29,000 in September, well below the 84,000 forecast, while the unemployment rate edged up to 4.2%. August was revised down to +133,000 and July flipped to a loss of 10,000 jobs. Average hourly earnings rose 0.1% to $37.81, up 3.0% over 12 months.

A weaker-than-expected jobs report prompts markets to reassess the Fed's rate path. Before the report, the market-implied probability of a hike at the 27–28 October meeting was about 28%, down from nearly 69% a week earlier. Gold rose after the print but then faded.

Watch how pricing for the 27–28 October Fed meeting shifts after this report; sources differ by timing (another outlet cited 44% earlier in the day). Treasury yields fell at first and then rebounded, so it is worth seeing whether that pattern holds. The negative revisions may also hint at a cooling labor market.