Finimize - 🤞 Seven recession facts

What’s going on here?

US jobs piled up in September, with the latest data blowing past expectations.

What does this mean?

The state of the jobs market serves as a vital pulse check for the US economy, hinting at the health of both the country’s businesses and consumer spending. Nonfarm payrolls (NFP) are a major indicator of the market’s status: they track how many US jobs are added or lost in any given month, excluding a couple of sectors like farming. September’s release revealed that 336,000 jobs were added over the month, double what was expected. And because July and August’s numbers were revised higher after their first release, it seems the labor market was also more robust over the summer than initially estimated. The takeaway: the job market’s strong. Maybe too strong.

Why should I care?

For markets: Up, up, and away.

Remember, the Federal Reserve (the Fed) has two jobs: to keep inflation in check and the job market stable. Inflation’s still well above target, and this robust jobs data may force the Fed to stick to its aggressive stance. No wonder, then, that investors are now expecting the central bank to hike interest rates – already sitting at a 22-year high – again before December.

The bigger picture: The rate escape.

Rates staying higher for longer would weigh on the economy, making it more expensive for both everyday folk and businesses to borrow the cash they need. Plus, they can make issues pop up in unexpected places – just think of the trouble rising rates brought to US regional banks a few months ago. They wreak havoc on investments, too: high rates make it more tempting to save cash and bank the interest, and riskier assets like stocks end up less appealing as a result. That’s exactly why stocks, bonds, and commodities have all taken a slide lately, with markets fearing higher-for-longer rates and pushing prices down.

What’s going on here?

The British housing market took a slide in September, sending hopeful sellers back by more than a few places.

What does this mean?

UK house prices were staying true to the country’s spirit, remaining stoic and unemotional in the face of economic uncertainty. But a tremble on an upper lip quickly opened the floodgates, and property prices headed south, fast. September’s 0.4% drop from the month before means folk sold their keys for nearly 5% less than the same time last year, according to UK lender Halifax. That difference was slightly smaller in London, while the South of England saw the biggest change.

Why should I care?

For markets: I’m holding out for a bargain.

September’s price dip was a lot less steep than August’s, though, which Halifax believes is a sign that prices are about to hit their lowest point. But property experts disagree: they reckon prices will end up about 10% lower than before they started falling. Either way, inflation will likely call the shots. If it hits the Bank of England’s 2% target over the next few months, mortgage lenders will anticipate lower interest rates and bring down their own borrowing rates. Would-be homeowners, then, should keep an eye on the next inflation reading, out on October 18th.

Zooming out: Alexa, play Bills, Bills, Bills by Destiny’s Child.

The British rental market’s moving in the complete opposite direction, with online property firm Rightmove saying rental payments jumped by 12% in August from the month before. That means regular tenants are scrambling to find £1,300 ($1,590) on average every month to put a roof over their heads. And unfortunately for renters, those bills could build: interest rates are still sending landlords’ mortgages higher, and those increases tend to be funneled into rents with a delay.