The market digests the release of the US job creation data. The result was the reinforcement in the thesis that the American interest rate should stay high for a longer time, with the persistence of the strength in the labor market.

The Labor Department reported that the US economy created 263,000 nonfarm payroll jobs in September.

This is the lowest number since April 2021. However, as it was higher than expected by the market, the expectation is that the contractionary monetary policy will be maintained. The unemployment rate fell to 3.5% of the labor force, below the 3.7% expected and the previous month.

The impact was quick and negative, with repercussions on future indexes and interest rate pricing. The interpretation is that the Fed will maintain its posture focused on fighting inflation.
According to’s Federal Reserve Interest Rate Monitor, 80.1% of analysts expect Fed funds to be raised to a range between 3.75% and 4%, against 19.9% who estimate a range between 3.5% and 3.75%. In September, the Federal Reserve, the US monetary authority raised interest rates to a range between 3% and 3.25%, following a 0.75 percentage point increase.

Federal Reserve

What the analysts say

The data still shows the labor market extremely strong, according to Victor Candido, chief economist at RPS Capital. “But everything indicates that we may be close to the limit of job creation in the United States. The markets reacted badly when the data came out. We saw the stock markets falling, the dollar getting stronger, interest rates abroad opening up, and interest rates in Brazil also feeling a little bit. Overall, there are no big changes at the Fed, the plan is to raise 0.75 basis points at the next meeting and financial conditions are still tight,” he ponders.

William Castro Alves, Chief Strategist at Avenue Securities, points out that the slightly lower than expected salary increase in the annual comparison can also be seen as marginally positive. Alves believes that, with the concern with inflation, the demand component with higher salaries has great influence. The advance in terms of the slowdown in the labor market presented in this payroll is still very timid, “with an unemployment rate falling and staying further away from the FED’s projections for 2022 and 2023. The data reinforced the perception that there is still a lot of work for the FED in the sense of slowing down the labor market and avoiding an inflationary spiral with more salary increases”.

For Alex Lima, chief strategist at Guide Investimentos, the data came in slightly above the 255,000 expected by Guide. However, the unemployment rate coming back to 3.5% bothers the Fed’s mandate, according to him. “Stable average hourly wages are also not good news for those desperately looking for any indication of a cooling labor market. As we talked about this week on the Jolts survey, the market remains quite strong and wage growth shows no sign of slowing.”

Lima still sees more room for hikes in fed funds at the “tip of the curve,” given that “there are no implied hikes in the first quarter. If core inflation remains persistent, then we will have the double higher for longer. In my opinion, we have at least 125 bps for the next two FOMC meetings, 75 in November and at least 50 in December,” he evaluates.