US non-farm payroll in September
The September non-farm payroll report indicated a fall in the US labor market (SPY) (VFINX) compared to August 2017. September’s non-farm payroll report fell by 33,000 compared to a gain of 156,000 jobs in August.
This figure didn’t meet the market expectations of a 90,000 gain. It was the first drop in the payroll figure since September 2010.
Key highlights of the jobs report
- The healthcare (XLV) sector added 23,000 jobs in September.
- The employment in food services and drinking places dropped 105,000 in that month, as many workers were off due to the hurricanes.
- The professional and business services sector added 13,000 jobs in September.
- Employment in the manufacturing sector dropped 1,000 jobs in the same month.
Impact on the economy and markets
The fall in September’s payroll figure indicates that the labor market showed the first drop in performance in seven years. The weaker jobs report also affected the S&P 100 Index’s performance on that day. The S&P 500 Index immediately fell 0.3% on Friday, October 6, after the jobs report announcement.
The stronger labor market and inflation figures are positive signs for the economy (IWM) (QQQ) and for the market (SPY). However, the weaker payroll figure in September increased investor concern for the short-term economic outlook.
In the final part of this series, we’ll analyze the indicators that investors should watch this week.