Bloomberg Evening Briefing: Another Unexpected Surge in US Employment

US President Joe Biden touted powerful new jobs data as evidence that “Bidenomics” has driven America clear of the pandemic while maintaining employment at near record levels. Jobs unexpectedly surged in September—almost double what was expected—yielding yet more evidence of America’s remarkably durable labor market. Nonfarm payrolls increased 336,000 last month—the most since the start of the year—after sizable upward revisions to the prior two months. The unemployment rate held at 3.8%, and wages rose at a modest pace. But the surprising vigor of the job market suggests companies remain confident about their sales prospects, and while the pace of hiring has cooled since last year, its resilience remains a key source of strength for household spending and the broader economy. For the Federal Reserve, the labor market’s strength threatens to hinder progress on curbing inflation. And that’s the other side of the coin, since the central bank may see this as an excuse to raise rates again. On Wall Street, Treasuries extended a selloff that’s pushed up yields in the past month, which in turn threatens to drive up borrowing costs and then, well, you get the picture. Traders boosted bets on a Fed hike by year-end.

Biden has based his re-election campaign in large part on low unemployment. He’s also made no bones about his support for organized labor, going so far as to visit a United Auto Workers picket line—a first for an American president. And the UAW, the latest union to see significant traction in post-pandemic efforts for better pay and benefits, is gaining more ground. On Friday, the union announced it was giving Ford, General Motors and Stellantis a break from new walkouts as contract talks progress. UAW President Shawn Fain said his union was prepared to expand its strike to a GM plant in Arlington, Texas, but reached a last minute deal with the carmaker to include workers at a new battery joint venture in a new labor contract. “We don’t strike for the hell of it,” Fain said. “GM has agreed to lay the foundation for a just transition” to the age of electric vehicles.