HighIV Macro Policy & Sovereign Debt2 October 2026, Friday · 15:30 TRT (UTC+3)

US economy adds only 29,000 jobs in September

US non-farm payrolls rose by 29,000 in September, against expectations of around 90,000. The unemployment rate edged up from 4.1% to 4.2%. After the release, futures markets cut the probability of a rate hike at the October meeting to around 20%.

Location: WASHINGTON

According to Labor Department data published on 2 October, the combined figure for the previous two months was also revised down by 60,000. Deseret News reported that July was revised from a gain of 21,000 to a loss of 10,000, and August from 162,000 to 133,000. FXStreet, however, puts the July loss at 23,000; the two sources conflict on this item. According to Yahoo Finance, average hourly earnings rose 0.1% on the month and 3% on the year. The labour force participation rate rose from 61.6% to 61.8%.

In September the Fed raised rates by 25 basis points, lifting the policy range to 3.75–4.00%. Yahoo Finance reported that the probability of an October hike fell from 64% a week earlier to 20% after the data. FXStreet cited CME FedWatch at 21.59% for October and 100% for December. On the same day the 10-year yield eased to 5.18% and the 30-year yield to 5.57%.

Fed officials appear divided on direction. According to Yahoo Finance, Dallas Fed President Lorie Logan said on the evening of 1 October that at least 50 basis points of further tightening was needed. Vice Chair Philip Jefferson said on the same day that the decision should be guided by trends. The next FOMC meeting is on 27–28 October.

Talay assessment

Bottom line

A gain of 29,000 and a downward revision of 60,000 show that the energy shock is now leaving a mark on demand as well. The case for the Fed holding in October has strengthened, yet a December hike remains priced at 100%. The most likely path is a pause in October, with December decided on energy and inflation data.

Likely effects

US Treasury yieldsUncertainWeeks
Weak hiring pulled yields down across the curve. The 30-year yield fell to 5.57%, but holding above 5.5% shows that the term premium persists.
Household incomeNegative1–6 months
Annual wage growth of 3% is lagging energy-driven inflation. The loss of real income could slow consumption.
Türkiye external financingPositiveWeeks
The fall in the October Fed hike probability to 20% could ease pressure on emerging-market borrowing costs in the near term.

Possibilities, ranked

1
Hold in October, hike in December55%
The Fed keeps rates at 3.75–4.00% on 28 October and raises them by 25 basis points in December if inflation stays high.
Watch: The 28 October FOMC decision and October inflation data
2
Weakness delays the hike30%
If October payrolls also disappoint and unemployment nears 4.4%, the Fed postpones the December hike as well.
Watch: The unemployment rate in the October jobs report due in early November
3
Surprise hike in October15%
If energy prices spike again and Logan's line prevails, the Fed moves to hike in October.
Watch: The October hike probability on CME FedWatch rising above 50%

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

Non-farm payrolls▼ +29,000
Unemployment rate▼ 4.2%
October hike probability▲ 20%
US 30-year yield▲ 5.57%

Historical context