The weak September jobs report, released on Friday, October 2, brought a disappointing month of economic data to a close. In June, July, and August, about 70% of the economic data came in above expectations. In September and early October however, the vast majority of economic releases were below (raised) expectations. As noted above, the much anticipated September jobs report also came in below expectations, and there were few “silver linings” in the report. (see below for details). Our key take away from the September jobs report is that the steady improvement in the labor market (from horrendous, to horrible, to awful, to bad) over the last eight months seems to have stalled out at “bad” in September. This calls into question our forecast that the economy will begin to generate job growth by year end. It does not, however, alter our overall views on the economy, inflation or the Fed.
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