In the evening Beijing time, the US released its core non-farm payroll data for September. This employment report showed a slowdown in job growth, a slight increase in the unemployment rate, and a significant decline in wage inflation, completely alleviating market concerns about wage stickiness and recurring inflation. As previously mentioned, the focus of this non-farm payroll report was not primarily on the non-farm payroll data itself, but rather on wage growth and the unemployment rate; however, a decrease in the number of employed people was welcomed by the market. However, considering historical data revisions and seasonal statistical patterns, the US labor market is not heading into recession, but rather gradually returning from a previously overheated state to a moderate equilibrium, providing crucial data support for the Federal Reserve to maintain a wait-and-see monetary policy and postpone interest rate hikes.

Key data reveals: Overall cooling, inflationary pressures substantially eased.

The core non-farm payroll data released this time for September was significantly dovish overall, accurately signaling a cooling of wage inflation. All key indicators were weaker than the market's previous consensus expectations: September non-farm payrolls increased by 26,000, compared to market expectations of 90,000, a significant decline in monthly job growth, indicating a temporary cooling of corporate hiring intentions. The unemployment rate was 4.2%, up 0.1 percentage points from the previous 4.1% and the expected 4.1%, indicating a marginal easing of labor market tension. Average hourly earnings rose 3.0% year-on-year, compared to the expected 3.2% and the previous 3.1%, with wage growth continuing to decline, completely dispelling market concerns about entrenched wage growth . Previous figure revision: August non-farm payrolls were revised down from 162,000 to 133,000, a reasonable correction of the previously high employment levels. From a core perspective, the biggest highlight of this report is not the weakening employment situation, but the substantial easing of wage inflation. Wages are the core anchor of inflation; the decline in wage growth means that endogenous inflationary pressures in the United States are continuing to cool, and the persistent inflation problem that has long plagued the Federal Reserve is showing marginal improvement.

In-depth analysis: The slowdown in employment is a temporary cooling, not a trend of weakening.

The market's initial reaction to the extremely low job growth of 26,000 in September could easily lead to a misinterpretation of a significant deterioration in the labor market. However, considering the seasonal statistical patterns of the August non-farm payrolls factor and the data from the previous two months, this round of job decline exhibits strong characteristics of a temporary phase and does not signal a recession. From a seasonal statistical perspective, since 2000, the average August non-farm payrolls factor has remained stable at -110,000. In conventional statistical logic, the original August employment data is often inflated due to seasonal factors such as the end of summer vacation, students returning to school, and temporary workers leaving their jobs. Models would then correct the data downwards using a negative seasonal adjustment factor to eliminate seasonal noise. However, this August showed a significantly abnormal trend. The seasonal adjustment factor did not follow historical practice with a large negative correction, only slightly decreasing by 29,000, far below the historical average of 110,000. This resulted in a temporary overvaluation of the August employment data, potentially overdrawing some of the employment momentum. Furthermore, historical data shows that in the second revision of August non-farm payrolls, the probability of upward revision exceeds 80%, with an average upward revision of about 40,000, further confirming that this month's slight downward revision did not excessively absorb the previous seasonal disturbances. Based on this statistical characteristic, the sharp decline in job growth in September is essentially a mean reversion after the previous seasonal overvaluation, rather than large-scale layoffs or a collapse in demand. Coupled with the fact that employment remained relatively strong in July and August, this sufficiently demonstrates that the underlying resilience of the US job market remains; it is merely returning from an overheated state to normalized, moderate expansion, and there is no risk of a downward trend.

Policy Impact: Expectations for a Fed rate hike have cooled significantly, and a wait-and-see attitude has been established.

This non-farm payroll report perfectly aligns with the recent policy maneuvering logic of the Federal Reserve, completely dispelling market expectations for further interest rate hikes this year. The policy focus has officially shifted to "maintaining high interest rates and waiting for data to confirm the trend." Previously, there were significant divisions within the Fed: hawkish officials like Kashkari believed the US economy and employment were too resilient, monetary policy was insufficiently restrictive, and continued interest rate hikes were necessary; while centrist officials like Jefferson insisted on a cautious wait-and-see approach, advocating for more data to verify inflation and employment trends. After the data release, wage growth slowed and inflationary pressures eased, directly validating the centrists' wait-and-see logic and offsetting the hawks' demands for rate hikes. Even though current structural capital expenditures related to AI and geopolitical energy supply shocks still pose localized inflationary risks, the cooling of endogenous wage inflation is enough for the Fed to pause its tightening pace and not initiate rate hikes in the short term. Considering the statements from officials like Logan and Cook, the current upward trend in long-term US Treasury yields, the continued high interest rates, and the current cooling of employment mean the market can achieve a tightening effect without further rate hikes. The Fed's monetary policy will enter a long period of quiet observation.

Key Logic and Observation Points for the Market Outlook

This round of September's non-farm payrolls created an optimal macroeconomic combination of "resilient employment and easing inflationary pressures," providing favorable support for major asset classes. Falling wages lowered actual inflation expectations, pushing down real interest rates and significantly reducing the holding cost of gold, a non-interest-bearing asset. Meanwhile, the weakening employment trend mitigated fears of an economic recession, and overall market risk appetite steadily recovered. The core themes of subsequent macroeconomic game will focus on three points: first, whether wage growth can continue to decline, completely eradicating service inflation stickiness; second, whether the unemployment rate will continue to rise, confirming a steady cooling of the labor market; and third, whether exogenous inflationary shocks from geopolitical energy prices and AI structural investments will repeatedly disrupt the market.