Better seven weeks late than never

Jobs reports give investors a snapshot of the health of the broader economy, and a retroactive image of September just emerged—but it’s hard to make out what we’re looking at.

In a pleasant surprise, the government reported today that US payrolls actually grew more than expected back in September: Employment jumped by 119,000 over the month, its steepest increase since April and more than double what economists anticipated.

But job growth wasn’t the only delayed data point we got today that blew past expectations: Unemployment also jumped to 4.4%, its highest rate since October 2021. It didn’t help that revisions to previous reports revealed that the labor market actually lost 4,000 jobs in August instead of gaining 22,000 as originally reported.

Zooming out: The gains in job growth over this year have been uneven, further complicating the labor market picture. Just two sectors, healthcare and hospitality, accounted for 100% of the US job growth in 2025, while cuts are eating into every other industry.

Powell’s complicated puzzle

Once again, our fearless bespectacled leader Jerome Powell is left with more questions than answers.

Since hiring didn’t slow as dramatically as many feared during the shutdown, today’s numbers likely lower the chance of the Federal Reserve cutting rates in December. But while central bankers now have some new data to work with, they’ll be flying blind heading into their next FOMC meeting: The October jobs report has been basically canceled, and the November report will be delayed until after the FOMC meeting on Dec. 9 and 10.

Don’t forget: Inflation hasn’t gone away yet, either.

Markets dropped so sharply today because without another Federal Reserve rate cut, borrowing will stay expensive. That’s bad news for the AI boom, which is increasingly being built on debt, not cash. If the underlying credit supporting the AI economy can’t be paid back, well then…we all can visualize the domino metaphor.

“As we look ahead to 2026, the question is whether the powerful forces of AI, fiscal stimulus, and easing monetary policy can propel global markets beyond the gravity of debt, demographics, and deglobalization, toward a new era of growth,” wrote Chief Investment Officer at UBS Global Wealth Management Mark Haefele in a note today.

As of right now, that question remains unanswered—and investors are starting to get worried.—LB