Sept Payrolls Report (Finally)

November 20, 2025

"So okay.  AI is doing well.  How’s the rest of the economy doing?”

The short answer:  not great, but not a disaster.  September jobs data was slightly better than expected.  That is lowering the odds of a Fed rate cut decision in a few weeks.  As you all know, the market usually loves rate cuts.   So that’s putting a damper on the party this morning.  Morgan Stanley’s economics team put out a note mid-morning saying they no longer expect a rate cut.  The futures market now implies only a 35% chance of a rate cut.  So… blerg.

Here are the details.   There are two metrics here – (1) the number of jobs added economy-wide and (2) the unemployment rate.  

Total job growth was +119k, versus estimate of +51k.   So it was better than expected.   That’s good (albeit still on the low side).  The unemployment rate ticked higher to 4.4%.   That compares to 3.6%-4.0% the past three years.   So creeping higher.  But not spiking.

Both job growth and the unemployment rate were not great, but not terrible.   That is telling the Fed that they dont have to worry as much about the “unemployment” monster — and instead, can focus their single weapon on fighting the “inflation” monster.  To fight inflation, you leave rates higher.