U.S. stock index futures extended gains on Friday after September payrolls data came in well below forecasts, a miss that reinforced bets the Federal Reserve will hold interest rates steady this month. The S&P 500, Dow and Nasdaq 100 all pointed to a higher open as Treasury yields pulled back from multi-year highs.
S&P 500 E-minis rose 61.25 points, or 0.79%, after the Labor Department reported the economy added just 29,000 jobs in September. Economists polled by Reuters had expected 90,000 new jobs. The unemployment rate stood at 4.2%, above the 4.1% analysts had forecast.
Hiring misses forecasts as prior months are revised down
The weak print was compounded by revisions to earlier data. August's job gains were cut to 133,000 from 162,000, 29,000 fewer than first reported. July's figure flipped negative, revised down by 31,000 to a loss of 10,000 jobs.
Wage growth slowed as well. Average hourly earnings rose 3.0% from a year earlier, down from 3.1% in August.
Futures and bond yields rally together
Dow E-minis climbed 439 points, or 0.85%, while Nasdaq 100 E-minis gained 312 points, or 1.01%. The softer jobs data reinforced expectations that the Federal Reserve would keep interest rates unchanged at its meeting this month.
The rally spread to government debt. The 10-year Treasury yield fell six basis points to 5.174%, pulling back from a 24-year high set the previous day, while the 30-year yield eased 4.5 basis points to 5.568%.
A weaker labor market makes it harder for the Federal Reserve to raise interest rates to fight inflation, given its dual mandate of price stability and full employment.
Sources: Economy News (investing.com), Business | The Guardian
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