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Economic Data Release

SEP STRONG NFP IMPLIES FED HAWKS WILL PUSH FOR A DEC HOLD

ADMIN || 21st November 2025

In Sep Nonfarm payroll data released yesterday, payrolls climbed by 119,000, more than all forecasts in Bloomberg’s survey and the biggest increase since April. The three-month average payroll gains advanced to 62,000 from just 18,000 for the three months through August.

The jobless rate unexpectedly climbed to 4.4%, the highest since October 2021, but the increase was driven by an expansion in the labor force, with the participation rate climbing to 62.4%. LFPR has steadily increased from 62.2% in July to 62.4% in Sep which implies more people are looking for jobs and hence the increase in UR to 4.4% in Sep from 4.2% in July.

September nonfarm payrolls didn’t strengthen the case for a December rate cut. On the one hand, they payrolls showed more than twice as many jobs added as the consensus expected; on the other, past payrolls were revised down with August turning negative and the unemployment rate rose.

We do believe hiring likely dropped significantly in October and November but those data won’t be released until Dec. 16, so the September report is the only official jobs data policymakers will have at the Dec. 9-10 FOMC meeting. Based on the strength of September’s payrolls and the delays to subsequent data, we see a hold in the 10th Dec FOMC meeting. We have written the same view on 1st Nov in our opinion piece as below:

https://macro-spectrum.com/opinion/no-us-employment-data-means-no-dec-cut

Post NFP data release, the line up of Fed speakers spoke on same lines. Fed Governor Michael Barr post data release said the US central bank needs to proceed with caution in considering additional interest-rate cuts. Cleveland Fed President Beth Hammack called the September jobs data “stale” and reiterated her opposition to additional rate reductions. She also said cutting rates could threaten financial stability. At a separate event in Indianapolis, Chicago Fed President Austan Goolsbee signalled he’s still apprehensive about delivering another rate cut in December.

From a market perspective, the 3-4 bps fall in UST yields post data release are more an outcome of the severe risk off in US equities.

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