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Silver Lining in Challenging September Jobs Report for the Market

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September Jobs Report: Surprising Job Growth and a Silver Lining

The September jobs report delivered a shocker, with 336,000 jobs created, surpassing the expected 170,000. Additionally, there were substantial upward revisions in the previous two months, with August's gain revised to 227,000 and July's to 236,000. While this news is positive for job seekers, it has caused a jolt in the market. However, amidst the concerns, there is a silver lining.

Continuing Job Growth and Moderating Wage Inflation

Despite the market's reaction, the September jobs report reveals a continuation of strong job growth. The issue of inflation, which is a major concern for many, shows signs of moderation in wage inflation. Average hourly wages increased by 0.2% month over month, falling slightly below the consensus of 0.3%. Year over year, wages were up 4.2%, slightly below the expected 4.3%. This combination of job growth and wage inflation moderation provides a positive outlook for the economy.

Implications for the Market

The 10-year bond yield has seen an increase, reaching around 4.82% and rising by 11 basis points. This rise in bond yields suggests that the economy remains strong, which bodes well for cyclical stocks and commodities. Notably, copper, gasoline, and oil prices have seen an increase since the release of the jobs report. Companies like Freeport-McMoRan, a significant copper and gold producer, have experienced positive trading, serving as a proxy for global growth. Oil stocks like Occidental Petroleum have also seen gains, while Exxon is down due to reports of its interest in purchasing Pioneer Natural Resources. The market has shown mixed reactions, with some consumer names like Home Depot experiencing small declines, while Visa and industrials like Caterpillar have seen upward movement. In conclusion, while the September jobs report may have been surprising, it is important to analyze the market and understand why certain sectors are performing better than others. The report indicates continued job growth and moderating wage inflation, which are positive indicators for the economy. The market's response, including rising bond yields and the performance of various sectors, provides insights into the overall health and resilience of the economy.

Surprising Job Growth: Implications for New Businesses

The September jobs report has certainly raised eyebrows, with 336,000 jobs created, significantly surpassing expectations. While this news has caused a stir in the market, it also presents a silver lining for new businesses.

Job Growth and Wage Inflation

Despite the market's reaction, the report reveals a continuation of strong job growth and moderating wage inflation. This combination provides a positive outlook for the economy, potentially creating a favorable environment for new businesses. The increase in jobs suggests a robust economy, which could mean increased consumer spending and business opportunities.

Market Implications and Opportunities

The rise in the 10-year bond yield, along with the increase in commodity prices since the release of the jobs report, indicates economic strength. This could bode well for new businesses in the cyclical stocks and commodities sectors. Furthermore, the mixed market reactions provide valuable insights for new businesses. For instance, the upward movement of industrials like Caterpillar could suggest potential growth areas for new entrants in the market.
Lessons for New Businesses
While the September jobs report was surprising, it offers important lessons for new businesses. Understanding market reactions and identifying growth sectors can help new businesses strategize effectively. Moreover, the report's indication of continued job growth and moderating wage inflation can provide reassurance for new businesses about the health and resilience of the economy. Therefore, despite the initial shock, the report may not be such a catastrophe for new businesses after all.
Story First Published at: https://www.cnbc.com/2023/10/06/september-jobs-report-jolts-the-market-but-theres-a-silver-lining.html
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