What to expect from US jobs report after lengthy data blackout?

During the 43-day US government shutdown, investors, businesses, policymakers, and the Federal Reserve were groping in the dark for clues about the health of the American job market. The federal workers who collect data on hiring and unemployment had been furloughed and couldn’t do their jobs.

Now that the shutdown is over, the Labor Department will finally let a little light in on Thursday, releasing jobs numbers for September — nearly seven weeks after they were due.

Economists expect to see a continuation of what was happening in the spring and summer: weak hiring but few layoffs. That awkward pairing means Americans who have already found work mostly enjoy job security, and those who don’t often struggle to find employment.

Economists predict that US employers added 50,000 jobs in September, unimpressive but an improvement on the paltry 22,000 they added in August. And forecasters expect that the unemployment rate remained at a low 4.3%, according to a survey by FactSet.

Normally the stock and bond markets would shrug off such old data, said market strategist Matthew Ryan at the financial services firm Ebury. But investors are so desperate for fresh economic news that “we expect volatility around the report to be extremely high".

September job data could sway interest rate cut

The job market has been strained this year by the lingering effects of high interest rates engineered to fight a 2021-2022 spike in inflation and uncertainty around Trump’s campaign to slap taxes on imports from almost every country on earth and on specific products — from copper to foreign films.

Labor Department revisions in September showed that the economy created 911,000 fewer jobs than originally reported in the year that ended in March. That meant that employers added an average of just 71,000 new jobs a month over that period, not the 147,000 first reported.

Since March, job creation has slowed even more — to an average 53,000 a month. During the 2021-2023 hiring boom that followed COVID-19 lockdowns, by contrast, the economy was creating 400,000 jobs a month.

Stephen Stanley, chief US economist at the bank Santander, is a bit more optimistic about September hiring than most of his peers. He forecasts that employers added 75,000 jobs.

President Donald Trump’s crackdown on illegal immigration is expected to reduce the number of people looking for work, which means that the economy can create fewer jobs without sending the unemployment rate higher.

In the past, Stanley wrote in a commentary on Wednesday, the “breakeven’’ point for monthly job creation was seen as somewhere between 125,000 and 150,000. But as fewer immigrants seek work, he says, the job market can remain stable even if employers add just 50,000 jobs a month, maybe fewer.

Once the September numbers are out, businesses, investors, policymakers and the Fed will have to wait awhile to get another good look at the American labour market.

The Labor Department said Wednesday that it won't release a full jobs report for October because it couldn't calculate the unemployment rate during the government shutdown.

Instead, it will release some of the October jobs data — including the number of jobs that employers created last month — along with the full November jobs report on 16 December, a couple of weeks late.

That means the September jobs numbers will likely get extra attention. They are the last full measurement of hiring and unemployment that Fed policymakers will see before they meet on 9-10 December to decide whether to cut their benchmark interest rate for the third time this year.