Ahead of the report, traders were pricing in only a 23% of a second Fed rate hike at the U.S. central bank's policy meeting later this month.
The U.S. labor market showed weakness in September, potentially giving the Federal Reserve room to hold interest rates even as inflation remains elevated.
The U.S. added 29,000 jobs in September, according to the government’s Nonfarm Payrolls Report released Friday morning. That was below the consensus forecast of 90,000 and compared with August’s gain of 133,000 (revised down from an originally reported 162,000).
The unemployment rate rose to 4.2%, versus expectations of 4.1% and August’s reading of 4.1%.
In addition to August’s downward revision, July’s 21,000 jobs gain was revised to a jobs loss of 10,000.
Already higher on the session, bitcoin continued just under $87,000 in the minutes following the release. U.S. stock index futures were adding to gains, the Nasdaq rising 1.2%.
The 10-year Treasury yield slumped by 7 basis points to 5.17%, and the 2-year yield fell by a similar margin to 4.71%. Gold gained more than 1%, and the greenback fell versus major currencies.
After an unsettling rise in interest rates throughout September, buyers had returned to the bond market late this week. Short-term rate markets had, at one point earlier in the week, nearly fully priced in a second rate hike from the Federal Reserve at its Oct. 28 meeting. Those odds, though, had plunged to just 23% in the 48 hours prior to this morning’s jobs data.