TMGM Daily Market Breakfast: 03 October 2026

Morning Snapshot

• U.S. nonfarm payrolls rose by 29,000 in September, far below the 90,000 consensus, while July and August payrolls were revised down by a combined 60,000.
• The U.S. unemployment rate rose to 4.2% from 4.1%, labor-force participation increased to 61.8% from 61.6%, and average hourly earnings growth slowed to 3.0% year on year from an expected 3.2%.
• The Dollar Index fell below 102.00 and traded near 101.80 after the jobs report, while the euro rose to around 1.1260, sterling climbed above 1.32 and the New Zealand dollar advanced to about 0.5610.
• Chicago Fed President Austan Goolsbee said the labor market is steady and that the inflation side of the Federal Reserve’s mandate is now more important.

Market Developments

Foreign Exchange

The U.S. dollar weakened sharply after the September payrolls report, with the Dollar Index falling below 102.00 and trading near 101.80. EUR/USD rose to around 1.1260, GBP/USD climbed to about 1.3250 after rebounding from below 1.3200, and NZD/USD traded near 0.5610.

Macroeconomics & Central Banks

U.S. September Payrolls Miss Sharply as Unemployment Rises and Wage Growth Slows

U.S. employers added 29,000 jobs in September, well below the 90,000 expected. The August payrolls gain was revised down to 133,000 from 162,000, while July was revised to a decline of 10,000 from a previously reported increase of 21,000, leaving the two months revised lower by a combined 60,000.

Other details of the labor-market report also pointed to softer conditions. The unemployment rate rose to 4.2% from 4.1%, while the labor-force participation rate increased to 61.8% from 61.6%. Average hourly earnings rose 0.1% month on month, slowing annual wage growth to 3.0% from an expected 3.2%.

The weaker employment data prompted a broad dollar selloff. The Dollar Index dropped below 102.00 and traded near 101.80 after the release. The euro rose to around 1.1260, sterling climbed to about 1.3250, and the New Zealand dollar advanced to roughly 0.5610.

The report also drove a reassessment of near-term Federal Reserve expectations. Market pricing cited in the reporting showed the probability of an October rate increase falling to around 17%, while separate reporting put hold odds at 79%.

Goolsbee Says Inflation Now Outweighs Labor Concerns in Fed’s Policy Focus

Chicago Fed President Austan Goolsbee said the U.S. labor market is steady and that the inflation side of the Federal Reserve’s dual mandate is now more important. In an interview with Fox Business, Goolsbee said inflation concerns currently outweigh labor-market concerns.

The remarks came after a softer September employment report showed slower job creation, a higher unemployment rate and weaker wage growth, adding to the policy debate over whether the Fed needs to tighten further.