Powell: prepare the Papa John’s coupons, because the Fed has never been closer to getting that soft landing pizza party. September’s jobs report lapped expectations yesterday, adding 254,000 jobs compared to the 150,000 Wall Street predicted in the latest sign that the economy is holding strong.

Some other highlights:

• The unemployment rate fell 0.1 percentage point to 4.1%.
• The underemployment rate (for people working part-time but who want to be working more and so-called “discouraged workers”) also dropped for the first time in about a year.
• The biggest employment gains last month came from sectors like hospitality and construction, and hourly pay inched up about 0.4%, which if you zoom out, means wages are up 4% compared to a year ago.

Plus, August’s revised jobs report showed the US actually created 159,000 jobs, up from 142,000 initially reported last month.

What this means for the Fed

Last month, Jerome Powell announced a whopping half-percentage-point interest rate cut after four years of keeping rates high to avoid pushing inflation even higher. The big cut came after this year’s rising unemployment rate had him worried that without some substantial moves, things could get worse. Now, September’s stellar jobs report means the Fed is less likely to make deep cuts during its next few meetings, especially in November.

Smaller rate cut expectations are already kicking in. Treasury yield rates soared yesterday, and the average 30-year fixed mortgage rate jumped 27 basis points to 6.53%. Both are extremely sensitive to anything that could affect the Fed’s rate decisions, and the great jobs numbers mean the Fed might not have to cut rates as aggressively as previously expected.

Looking ahead…An A+ jobs report with unemployment declining (plus the economic threat of the port strike abating) this close to election day could provide a nice bump for Vice President Kamala Harris since many voters have questioned the current administration's handling of the economy.—MM

Biden has discouraged Israel from attacking Iran’s oil as prices rise. After inadvertently spiking oil prices Thursday by saying he was in discussions about an Israeli strike on Iran’s oil infrastructure, the president said yesterday that the Israeli government had not yet decided what to do, and, “If I were in their shoes, I’d be thinking about other alternatives than striking oil fields.” The remarks came as oil prices had their biggest gains this week since early 2023. They were also part of the first press briefing Joe Biden has attended as president, where he surprised reporters and touted the strength of the US economy.

Meta’s got a new AI video generator. Looking to rival tech like OpenAI’s Sora and the one that made this questionable Miyazaki knock-off, Meta announced Movie Gen yesterday, an AI model that creates realistic-looking videos with sound and audio clips. The addition of sound in a text-to-video AI system is noteworthy, and Movie Gen can also edit existing footage based on text prompts. But don’t get too excited—the new model isn’t available to the public yet.

🏛 SCOTUS to decide whether Mexico can sue gunmakers. The Supreme Court, which begins its new term on Monday, has agreed to weigh in on whether or not the Mexican government’s $10 billion lawsuit over cartel violence can proceed. US gun manufacturers, including Smith & Wesson, Beretta, Colt, and Glock, are trying to get the high court to toss the case. The lawsuit was revived by an appeals court after a trial judge found that it was blocked by a 2005 law that gives firearm companies broad immunity. The suit alleges that at least 70% of guns found at Mexican crime scenes are American-made.—AR

Spirit Airlines—the preferred choice among budget-conscious travelers who find hidden fees charming—is exploring the possibility of filing for bankruptcy, although Chapter 11 is not imminent, per the Wall Street Journal.

• This isn’t necessarily the end for Spirit. By potentially reorganizing its $3.3 billion debt load, it could follow in the jet streams of fellow air carriers Scandinavian Airlines and Delta that declared bankruptcy in the past and eventually recovered.

The immediate concern: Spirit’s debt load includes $1.1 billion worth of secured bonds due within a year that have an Oct. 21 deadline to be extended or refinanced.

Spirit’s turbulent 2024: It began with a federal judge striking down a $3.8 billion merger with JetBlue due to antitrust concerns in January. It has continued with Spirit furloughing 186 pilots, grounding a portion of its fleet due to an engine recall, and abandoning dozens of routes planned for November and December. Spirit’s stock plummeted after news of the possible bankruptcy broke and is down nearly 90% YTD.

The turbulence isn’t new: While other airlines have found ways to recover from the pandemic downturn, Spirit hasn’t—the airline reported its 11th consecutive quarterly loss in August.—DL

When you absentmindedly hit “agree” to an app’s terms & conditions, you might be signing over more than you think: A New Jersey couple that got T-boned during an Uber ride is “surprised and heartbroken,” outlets reported this week, after an appeals court said an arbitration clause in the terms for using Uber Eats barred them from suing Uber.

For context: John and Georgia McGinty filed a lawsuit saying their Uber driver went through a red light and crashed, causing the couple to sustain long-term injuries and to miss work. Two months prior, their 12-year-old daughter agreed to the Uber Eats T&Cs when using her mom’s account to order pizza.

So what? A state appeals court ruled that the arbitration clause the child unknowingly agreed to—which mentions settling “disputes concerning auto accidents or personal injuries” outside of court—applied to her parents’ crash. Uber also said the McGintys had already agreed to other T&Cs in their rideshare account that contained arbitration language. Arbitrators are generally perceived as more sympathetic to companies than juries, and arbitration allows companies to avoid embarrassing public trials.

Zoom out: Disney pulled a similar move this summer when it said Disney+ T&C protected its parks from a wrongful death lawsuit, but the company dropped the argument after harsh blowback.—ML

Scammers are making millions off a remarkably low-tech heist: stealing IRS refund checks out of the mail. They’re getting access to the funds because the tax agency is still putting lots of checks through the postal system like a grandma sending out birthday cards. More than 90% of US taxpayers opt to get their refunds via direct deposit, but the IRS nonetheless sent out ~10 million paper refund checks last year, per IRS data cited in the Wall Street Journal.

To compound the problem, the IRS’s system won’t allow people who picked the paper check option to switch over to direct deposit, so in some cases, replacement checks are also getting pinched. There is a fix coming, but in typical government style, the IRS says it’s years away. Bottom line: “We strongly urge direct deposit. It’s the fastest and safest way for us to get taxpayers their refunds,” IRS Commissioner Danny Werfel said.—AR