In September 2024, U.S. nonfarm payrolls surged by 254,000, marking the largest gain in six months, with the unemployment rate dropping to 4.1%. Wages increased by 0.4%, and job growth outpaced expectations. The robust report signaled economic resilience, reducing the likelihood of significant Federal Reserve rate cuts. However, betting markets are still set on 1% rate cuts this year.

‍

Wages Rise Beating Estimates

‍

In September, average hourly earnings for U.S. private nonfarm payrolls rose by 0.4% to $35.36, surpassing the forecasted 0.3%. Wages for private-sector production and nonsupervisory employees increased by 0.3% to $30.33. Over the past year, wages rose 4.0%, exceeding market expectations. Rising wages, alongside increasing oil prices, pose significant risks to future inflation. Higher wages often lead to increased consumer spending, which can drive prices higher, fueling inflation. While current wage growth may reflect a recovery from previous price surges, there is a risk of the economy overheating if wages continue rising too quickly.

‍