Economy

For months, the economy has been like a jigsaw with one mismatched piece: Consumer spending has been holding up and overall growth has been solid, but the job market has looked treacherously wobbly.As of Friday, the last piece of that puzzle is finally clicking into place.Fresh employment data for September showed that hiring picked up strongly, the unemployment rate dipped and wage growth came in strong — adding to a string of recent data pointing to economic resilience.And the incoming evidence points to a clear conclusion: The economy is robust.Data revisions released last week showed that growth has been stronger and incomes have been more solid than previously understood. Retail sales data are holding up. And now, employers appear to be meeting resilient consumer demand by continuing to expand their work forces.In fact, the report reinforced that by many measures, the job market is as healthy as it has ever been.The fresh data is good news for the Federal Reserve, for the White House and for Kamala Harris’s campaign as the vice president and Democratic nominee tries to make an economic case to voters ahead of the presidential election in November.It supports the idea that the economy either is headed for or has possibly already achieved a soft landing, in which inflation comes down without spurring economic pain in the process.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

NEW YORK/PARIS (Reuters) -French President Emmanuel Macron has given top U.S. financiers a candid assessment of his country’s financial woes, flagging the potential for looming tax increases, sources said this week, in an effort to tamp down concerns over France’s gaping deficit. Macron, a former investment banker, met with more than a dozen Wall Street executives in New York during the U.N. General Assembly late last month, aiming to reassure them about France’s deteriorating fiscal outlook, according to three people who heard Macron speak. In a more than one-hour meeting with 13 senior financiers and asset managers including Goldman Sachs President John Waldron and Blackstone (NYSE:BX) CEO Stephen Schwarzman, Macron offered a frank view of the French and European economies, they said.Mary Erdoes, CEO of JPMorgan asset and wealth management, Jim Zelter, president of Apollo Global Management (NYSE:APO) and Morgan Stanley’s co-president Dan Simkowitz also attended the meeting.Macron spoke about increasing taxes to fund the country’s budget, one of the participants told Reuters, speaking on condition of anonymity because the meeting was private. The president was also candid about France’s economic challenges, the source said.He also touted France as a potential investment destination and discussed how to expand business from multinational companies.Macron was well acquainted with the meeting participants after seven years of holding “Choose France” summits. Those gatherings sought to shift investor perceptions of France as a dynamic, pro-business nation instead of a sclerotic, high-tax country.He met the bankers on Sept. 24 just as his new minority government was starting to thrash out a budget to address a deficit that risks topping 6% this year, fueling speculation about tax hikes.The meeting followed a smaller, but similar gathering during the Olympics in Paris this summer.Europe’s economic slowdown has spurred the need to consolidate public finances through targeted, and temporary, tax increases, Macron said, according to a second person who was present at the meeting.The hikes would mark a U-turn for France, which cut taxes for big business under Macron. He asked investors at the meeting to not over react to any tax increases, and said his goal was primarily to cut spending.Foreign investors own around 50% of France’s overall government debt, much higher than other euro zone countries including Italy, Spain and Germany. Macron aides said the president has been focused on France’s credibility with investors since the summer’s snap election, which resulted in a hung parliament and political uncertainty. Macron’s office declined to comment beyond the brief statement it made last week announcing the meeting.In a clear sign of investor nerves, French borrowing costs, which are typically lower than Spain’s because the country is seen as less risky, have exceeded Spanish ones.Still, Macron avoided making promises to the assembled financiers, the first participant said.The president is taking a proactive approach in meeting with business leaders, a third person said. The Wall Street gathering came a week before Prime Minister Michel Barnier announced that he planned to bring the deficit down to 5% in 2025 by cutting spending and raising some taxes temporarily on big corporations and wealthy individuals. Barnier’s budget minister has spoken of a 60-billion-euro belt-tightening drive next year.Macron also discussed artificial intelligence, nuclear energy and regulations, the participants said.  More

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The September jobs report was surprisingly strong, and the details show that growth came from many different areas of the economy.
The biggest contributions came from leisure and hospitality, with 78,000 new positions, and health care and social assistance, at 71,700. If private education was added to the health-care group, as some economists do, that category would have been the biggest growth area of the month.

Within hospitality, food services and drinking places saw jobs jump by 69,000. That is a notable increase from the average monthly gain of 14,000 over the past year, according to the Bureau of Labor Statistics.
Government and construction were also bright spots, adding 31,000 and 25,000 jobs, respectively. Professional and business services grew by 17,000 jobs, which is a notable change for a category that had shed jobs in recent months.
LPL Financial’s chief economist, Jeffrey Roach, said in a note to clients that the report showed “fairly broad-based” job growth, but did highlight that the percent of workers holding multiple jobs rose 5.3%.
“This solid report increases the odds that the economy will continue to grow above trend in the next quarter. … The only caution flag could be the rise in those with multiple jobs,” Roach said.
Two key areas that lost jobs last month were manufacturing and transportation and warehousing, though each category shrank by fewer than 10,000 jobs.

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Black and Hispanic workers experienced a decline in unemployment, while the rate held steady for Asian workers.
The jobless rate fell significantly for both Black and Hispanic men.
The labor force participation rate rose for Black workers, while slipping for Asian and Hispanic workers

Job seekers attend the JobNewsUSA.com South Florida Job Fair held at the Amerant Bank Arena in Sunrise, Florida, on June 26, 2024.
Joe Raedle | Getty Images

The unemployment rate for men in Black and Hispanic racial groups declined in September while staying little-changed for other racial groups, according to data released Friday by the Department of Labor.
In September, Black men saw their jobless rate fall to 5.1% from 5.9% in the month prior. The jobless rate similarly fell for Hispanic men to 4.1% from 4.8% last month.

The overall unemployment rate inched lower to 4.1% in September, down just 0.1 percentage point from August.

“The Black unemployment rate is still 1.5 times that of white workers, but it edged down in September to the lowest level since April,” said Bankrate economic analyst Sarah Foster. “Black unemployment typically holds about two times higher than White unemployment, among the first to be laid off. Meanwhile, the unemployment rate for Hispanic workers hit the lowest since June.”
This marks the first fall in unemployment for Black workers in five months, Foster added.
Meanwhile, the jobless rates for other racial groups remained little changed or fell slightly. Unemployment for Asian workers held steady at 4.1%. For white workers, it inched down to 3.6% from 3.8% in September.
The jobless rate for women across racial groups recorded small declines. Black and Hispanic women both experienced a 0.2% drop in unemployment in September to 5.3% and 4.8%, respectively. Unemployment for white women also ticked lower to 3.1% from 3.4%. The jobless rates for Asian workers separated by gender were not readily available.

The employment-to-population ratio for female prime-age workers, or those ages 25 to 54, fell to its lowest level since May.
“Prime-age labor force participation still remains near a historic high despite ticking down from its recent record-setting high in August,” said Foster.
Last month, the labor force participation rate — the percentage of the population that is either employed or actively seeking work — was unchanged at 62.7%.

Among white workers, the rate inched up just 0.1 percentage point to 62.4%, while it fell to 67.4% from 67.8% for Hispanic workers. Among Asian workers, participation slipped to 65.3% from 65.5%, and rose among Black workers to 62.9% from 62.7%.
— CNBC’s Gabriel Cortes contributed to this report.

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By Katie PaulNEW YORK (Reuters) – Facebook (NASDAQ:META) owner Meta announced on Friday it had built a new AI model called Movie Gen that can create realistic-seeming video and audio clips in response to user prompts, claiming it can rival tools from leading media generation startups like OpenAI and ElevenLabs. More

After the Labor Department reported a gain of 254,000 jobs in September and a decline in the unemployment rate to 4.1%, traders of futures that settle to the Fed’s policy rate all but abandoned bets that the U.S. central bank will follow its half-point reduction last month with any more like-sized moves.”The expectation now would be for a Federal Reserve that treads far more cautiously in easing policy,” said Karl Schamotta, chief market strategist for Corpay. Rate futures are now pricing in quarter-point reductions at each of the next Fed meetings through the middle of next year, bringing the policy rate down to around 3.25%-3.5%. The policy rate is currently in the 4.75%-5.0% range. Prior to the jobs data traders had been pricing in at least one more half-point rate cut before the end of this year.  More

FED FUNDS FUTURES: Odds of a 25-bp cut at the Fed’s November meeting rose to 93% from around 71% before the data, according to LSEG calculations.COMMENTS: WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY“This is definitely much stronger than what was expected. I think it’s catching quite a few people by surprise. It means that the 50-basis point rate cut that we already got – which was good for sort of psychology and in the overall sentiment; and the next rate cut might not need to be as big. The initial reactions are that yields are jumping, and the market is taking off some of the degree or the number of rate cuts off the table or pushing them further out. I think on the equity side, equity markets are still buoyant. It looks like they like this. So, it could be a case of good news is good news.”PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK”They were much stronger than expected and obviously it negates the fear of perhaps the economy moving to negative growth anytime soon… it basically tells us economic activity in the fourth quarter is likely to remain at a solid pace. The fact that you only had 13 cents rise in hourly wages is good news for the Fed. It’s a blowout report, so it’s a good surprise, but I also think it may now slow the pace of rate cuts.”GENE GOLDMAN, CHIEF INVESTMENT OFFICER, CETERA INVESTMENT MANAGEMENT, EL SEGUNDO, CA “The number was phenomenal. It came in well above expectations. The unemployment rate came down and it shows the economy is strong.” “The market is seeing good news as good news. This news today confirms that the economy is on solid footing. I’d view today’s initial move in stocks with a little bit of caution because the dollar is strengthening and bond yields are higher,” “All the data this week suggested the economy is strong. This puts a final nail in the coffin for the Fed to cut only 25 basis points.”“Another point that the market should be concerned about is that average hourly earnings increased by 0.4% m/m, which was enough to push y/y number to 4%, a five-month high.”KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO“Blockbuster payrolls report by any measure. I think a no-landing scenario for the U.S. economy has suddenly become far more plausible. This is a report that is beautiful on the headline level as well as the internals. You’re looking at a sustained rise in job creation over the last three months, the unemployment rate ratcheting down, the participation rate holding steady, all of which indicate that this is not a statistical aberration that might be washed out in coming months. So ultimately what this means is that Treasury yields are spiking across the front of the curve, rate cut expectations are being pulled back, and the expectation now would be for a Federal Reserve that treads far more cautiously in easing policy.”BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT,MENOMONEE FALLS, WISCONSIN “A pleasant surprise to the upside, but mentally the Fed isshaving about 68,000 from the headline payrolls number. This isbecause the Bureau of Labor Statistics has not yet revised theirnumbers from their latest benchmarking study. August payrollsare also the ones most often revised because there are all sortsof issues with people going back to school. “Despite the large upside surprise to the payrolls number,the aggregate weekly hours worked fell 0.1%. This could bebecause of Hurricane Helene, which wreaked havoc during thesurvey week.  “Unless we see a big downside surprise with the November1st report for October, the Fed will take this as a reason tocut only 25 bps.”GLEN SMITH, CHIEF INVESTMENT OFFICER, GDS WEALTH MANAGEMENT,FLOWER MOUND, TEXAS    “Friday’s jobs report was stronger-than-expected and thatgives the Federal Reserve flexibility to either cut interestrates by 25 basis points at their next meeting on November 7, ortake a pause and revisit a potential rate cut in December. Itwas still the right decision for the Fed to cut rates by adeeper 50 basis points in September, which was essentially aninsurance policy for the Fed to guard against any risk of adeterioration of the labor market, which had been slowing priorto Friday’s report.”    “The labor market data may become clouded over the next fewreports by a perfect storm of factors, such as the port strikeand the disruptions from Hurricane Helene. While these dataimpacts aren’t likely to change the Fed’s interest rate course,it may make it tougher for both central bankers and investors togauge accurately how the labor market is faring.”    “The stock market has been living up to October’s reputationof increased volatility, and we expect this choppiness tocontinue for the next few weeks as the market starts to navigatethe uncertainty surrounding the election, the Federal Reserve’snext move and corporate earnings reports.”LINDSAY ROSNER, HEAD OF MULTI-SECTOR INVESTING, GOLDMAN SACHSASSET MANAGEMENT (in emailed note) “Today’s data hit a grand slam with payrolls coming instrong, positive revisions, and unemployment falling. Theeconomy is heading into the post-season solidly. This is a beaton every aspect and the Fed must be smiling as they got theirbats out! This is a credit positive as the fundamentals of thiseconomy are on strong footing.”  More

NEW YORK (Reuters) – The dollar jumped to a seven-week high on Friday after data showed that employers added more jobs than expected in September, leading traders to pare bets that the Federal Reserve will cut rates again by 50 basis points at its November meeting.Nonfarm payrolls increased by 254,000 jobs last month. Economists polled by Reuters had forecast payrolls rising by 140,000 positions.The unemployment also unexpectedly slipped to 4.1% from 4.2% in August.It is a “blockbuster payrolls report by any measure. I think a no-landing scenario for the U.S. economy has suddenly become far more plausible,” said Karl Schamotta, chief market strategist at Corpay in Toronto.”Rate cut expectations are being pulled back and the expectation now would be for a Federal Reserve that treads far more cautiously in easing policy,” Schamotta said.Improving economic data and more hawkish comments from Fed Chair Jerome Powell on Monday, in which he pushed back against expectations of continuing jumbo-sized rate cuts, has led traders to reduce bets on a 50-basis-point reduction at the Fed’s Nov. 6-7 meeting. Those odds fell further after Friday’s data. Traders are now pricing in only a 10% chance of a 50-bps-rate cut, down from around 32% earlier on Friday, the CME Group’s (NASDAQ:CME) FedWatch Tool shows.The dollar index reached 102.64, the highest since Aug. 16, and the euro slipped to $1.0959, the lowest since Aug. 15.The dollar gained to 148.80 yen, the highest since Aug. 16. More