Friday’s jobs report

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Friday’s jobs report is likely to show employers hired at a steady pace last month, the latest sign of a resilient U.S. economy that has contributed to the recent bond-market rout, according to analysts’ forecasts.

Economists surveyed by The Wall Street Journal estimate employers added 170,000 jobs in September, down slightly from 187,000 the prior month. That would round out a summer of slower job growth than in the first half of the year. Such an advance also would be in line with the average monthly pace of job growth in the three years before the pandemic. Some forecasters expect stronger job gains.

Economists see the September unemployment rate coming in at a historically low 3.7%, nearly the same as the prior month. 

The jobs report comes as a selloff in long-term bonds has pushed yields to 16-year highs, tightening financial conditions in a way that could threaten hopes for an economic soft landing, where the economy slows enough to cool inflation without nosediving into recession. 

Investors will be watching the jobs report closely for signs of the economy’s health. Robust September hiring could push bond yields higher by showing the labor market remains strong. Subdued job growth, on the other hand, could stem the rise in yields, as did a mildly weak employment report on private payrolls released by payroll-processing company ADP on Wednesday. 

Forecasters estimate average hourly earnings rose 4.3% in September from a year earlier—the same pace as in August. The Federal Reserve has been raising rates for 18 months to combat inflation by slowing the economy. Though inflation has eased considerably, Fed officials are monitoring wage growth closely for signs of price pressures as they consider whether to raise rates again later this year. 

The Labor Department will release the September employment report at 8:30 a.m. Eastern time Friday.