September Jobs Report Commentary from MBA's Mike Fratantoni

October 4, 2024 Press Release
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The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in September.  

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“Across every dimension, the September employment report showed a job market that was stronger than expected. Job growth exceeded expectations with a 254,000 gain for the month, and the prior two months’ data were revised upwards by a cumulative 72,000 gain. The unemployment rate dropped from 4.2% in August to 4.1% in September. Additionally, wage growth re-accelerated to 4%. All of these signs point toward a successful “soft landing,” but also stoke worries that inflation may not move in a straight line to the Fed’s 2% target.  This report could certainly slow the expected pace of rate cuts.

“That said, while the aggregate job gains were strong, as in prior months this year, the growth was concentrated in a few industries, notably food services, health care, construction, and government hiring. Spending and hiring at restaurants and bars is potentially at risk if consumers continue to pull back on discretionary items, as some data have indicated.

“Interest rates jumped on the release of this report. MBA’s forecast is for longer-term rates, including mortgage rates, to remain within a relatively narrow range over the next year. This news will push mortgage rates to the top of that range, but we do expect that mortgage rates will stay close to 6% over the next 12 months.”

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