US yields drop, dollar weakens, stock futures gain after jobs data

The US economy created only 29,000 jobs in September, a decrease from August's revised figure of 133,000 (previously reported as 162,000). Private-sector hiring added 46,000 positions, while government employment fell by 17,000.

The topline figure indicates a marked deceleration from the prior month. Beneath the surface, the data shows a mixed situation: construction, manufacturing, and health care all registered gains, while information, financial activities, and professional and business services experienced declines.

September: Where jobs were added

• Private education and health services: +20,000, including 23,000 in health care and social assistance
• Construction: +11,000
• Leisure and hospitality: +10,000
• Manufacturing: +9,000
• Transportation and warehousing: +7,600
• Other services: +6,000
• Retail trade: +5,800
• Wholesale trade: +5,000
• Utilities: +500

September: Where jobs were lost

• Government: −17,000
• Information: −10,000
• Professional and business services: −9,000, with temporary help services declining by 10,900
• Financial activities: −7,000
• Mining and logging: −2,000

The three-month trend: Modest growth, concentrated hiring

From July through September, nonfarm payrolls rose by 152,000, an average of roughly 51,000 jobs per month. This period included July's drop of 10,000, August's gain of 133,000, and September's increase of 29,000.

Private employers added 163,000 jobs, averaging about 54,000 per month, while government employment fell by 11,000, a monthly average loss of about 3,700.

The sector breakdown highlights areas of sustained hiring and persistent softness:

• Private education and health services: +72,000, averaging +24,000 per month. Health care and social assistance contributed 71,400, accounting for almost all of the sector's net growth.
• Construction: +45,000, averaging +15,000 per month. Job creation occurred in all three months, though September's increase was the smallest.
• Manufacturing: +44,000, averaging roughly +14,700 per month. Hiring remained positive each month but slowed from 20,000 in July to 15,000 in August and 9,000 in September.
• Transportation and warehousing: +21,200, averaging about +7,100 per month. Employment rose throughout the quarter.
• Wholesale trade: +19,300, averaging roughly +6,400 per month, with gains every month.
• Other services: +15,000, averaging +5,000 per month.
• Leisure and hospitality: +9,000, averaging +3,000 per month. Gains in August and September largely reversed July's steep drop.
• Retail trade: +6,300, averaging +2,100 per month. Hiring was inconsistent, with a decline in August between two months of increases.
• Utilities: +3,700, averaging about +1,200 per month.
• Mining and logging: −2,000, averaging roughly −700 per month.
• Government: −11,000, averaging about −3,700 per month. August's increase did not offset losses in July and September.
• Professional and business services: −20,000, averaging roughly −6,700 per month, with declines in all three months. Temporary help services lost 20,700 jobs, averaging −6,900 per month.
• Information: −24,000, averaging −8,000 per month, as losses in August and September outweighed July's gain.
• Financial activities: −26,000, averaging about −8,700 per month, with employment falling each month.

What does it mean for the market?

The labour market continues to add jobs overall, but at a moderate pace. Education and health services, construction, and manufacturing together added 161,000 jobs over three months—more than the total nonfarm payroll gain. Losses in other sectors dragged down the headline figure.

Evidence of slowing momentum also appears within sectors that are still hiring. Construction and manufacturing added jobs each month, but their gains shrank progressively. Meanwhile, financial activities and professional and business services kept cutting workers.

For traders, the softer headline has some support from the underlying details. The report shows concentrated hiring and persistent weak spots, which could dampen expectations for additional Fed tightening. Still, the wage and inflation picture remains key in determining the Fed's scope to respond.

US Treasury yields are lower

The modest declines seen before the jobs report have deepened, particularly in shorter maturities:

• 2-year: 4.7246% currently, compared with 4.7809% in the earlier post. Down another 5.63 basis points, now down 6.24 basis points on the day.
• 5-year: 4.9373% now, versus 4.9926%. Down an additional 5.53 basis points, now down 6.77 basis points on the day.
• 10-year: 5.1842% now, versus 5.2242%. Down an additional 4.00 basis points, now down 4.98 basis points on the day.
• 30-year: 5.5738% now, versus 5.5989%. Down an additional 2.51 basis points, now down 2.92 basis points on the day.

The larger drop at the front end suggests traders are scaling back expectations for further Fed tightening. The market now sees a 16% probability of a hike in October.

US dollar is lower

The dollar traded mixed ahead of the data. It has since weakened against all major currencies shown except the Canadian dollar, with its earlier gain versus the CAD narrowing.

• EURUSD: Rose to 1.1247 from 1.1241. The euro is now 0.05% higher on the day, pushing the dollar slightly lower.
• USDJPY: Fell to 157.26 from 157.77. Its daily decline has widened to 0.51%, from 0.19% previously.
• GBPUSD: Rose to 1.3223 from 1.3209. Its daily gain has increased to 0.18%, from 0.08%.
• USDCHF: Dropped to 0.8263 from 0.8282. Its daily decline has widened to 0.53%, from 0.30%.
• USDCAD: Fell to 1.4228 from 1.4240. The dollar remains 0.06% higher on the day, but that is below the earlier 0.15% gain.
• AUDUSD: Rose to 0.6960 from 0.6937. Its daily gain has widened to 0.45%, from 0.12%.
• NZDUSD: Rose to 0.5622 from 0.5609. Its daily gain has increased to 0.34%, from 0.11%.

US stock futures are higher

• Dow: Now +425 points, versus +208 earlier. An additional 217 points higher.
• Nasdaq 100: Now +357 points, versus +170 earlier. An additional 187 points higher.
• S&P 500: Now +67 points, versus +36 earlier. An additional 31 points higher.

The initial reaction features lower yields, a broadly weaker dollar, and stronger stock futures. That combination suggests traders are drawing some comfort from reduced pressure for additional Fed tightening. The next question is whether these moves will hold as the North American session progresses.

Some technicals in Forex

EURUSD: The pair remains below its daily high of 1.1269. It is currently trading at 1.1858. After sharp declines yesterday, the price has moved away from its falling 100-hour moving average at 1.1319. The June 2026 low was at 1.13245. Those levels would need to be broken—and stay broken—to give buyers more confidence for further upside.

USDJPY: The pair fell below and away from its 200-hour moving average at 157.704 and its 100-hour moving average at 157.513. The breached 38.2% retracement at 157.136 has also been broken. Swing levels between 156.36 and 156.655 are the next target on further selling.