U.S. non-farm employment growth slowed in September, and the chance of the Fed suspending interest rate hikes rose to 86%

The U.S. Bureau of Labor Statistics announced on the 2nd that 29,000 new non-farm jobs were added in September, far lower than the 90,000 economists expected, and the unemployment rate rose slightly to 4.2% from 4.1% in the previous month. Employment growth has slowed sharply compared to expectations, raising the possibility that the Federal Reserve (Fed) will postpone raising interest rates in October.

The Labor Department also revised down its estimate of new nonfarm payroll employment in August to 133,000 from the originally announced surge of 162,000.

After the report was released, data from the CME Group's FedWatch tool showed that the futures market's odds of keeping interest rates unchanged at this month's policy meeting soared to 86% from about 76% the day before. The Federal Reserve raised interest rates by 1 percentage point (0.25 percentage point) last month to a range of 3.75% to 4%, the first rate increase in three years.

Seema Shah, chief global strategist at Principal Asset Management, said, "This data shows that patience, not panic, is needed. The Fed will have to see inflation rising again, not just strong growth, before it will raise interest rates again this year."

Bloomberg reported that the slowdown in employment growth was mainly due to a decrease in employment in government departments, information, and professional and business services. However, job opportunities increased in financial activities, health care, construction and manufacturing.

Although strong consumer spending and strong business investment support hiring, many cost-conscious employers have been reluctant to expand hiring. However, at the same time, layoffs have remained small and the number of initial unemployment benefits has fluctuated at the lowest level in 57 years.

With the unemployment rate still at historically low levels, Fed officials are likely to remain focused on inflation when considering interest rate policy.

However, economists expect that intensifying adverse factors caused by the Iran war, including high energy prices and tight supply chains, may disrupt the labor market starting from the end of this year and may continue into next year.

After the report was released, U.S. stocks rose in early trading, with the Dow Jones rising more than 300 points, the S&P 500 and Nasdaq rising 0.9% and 1.4% respectively, Philadelphia Semiconductor rising 2.5%, and TSMC ADR rising 1.2%.