Mohamed El-Erian, chief economic adviser at Allianz and president of Queens’ College, Cambridge, posted on X on Friday, October 2, 2026, that the latest US jobs data contained surprises. He stated, “The US jobs data is out and there are surprises: Job creation was only 29,000 in September, with the unemployment rate rising to 4.2% and monthly earnings growth moderating to only 0.1%. Add to that downward revisions to both July and August (about 60,000 jobs). On the supply side, a more encouraging development with labor force participation increasing to 61.8%. This will reinforce the impact of recent Fedspeak in calming expectations about an October rate hike.”
The jobs report follows recent coverage indicating a drastic drop in October rate hike expectations. Other reports have highlighted a weak labor market and strong inflation. Nick Timiraos also noted that a Federal Reserve Vice Chair had signaled a delay in rate hikes, and Lyn Alden pointed to the bond market dictating interest rates.
El-Erian's analysis suggests that the softer jobs data, particularly the low job creation and rising unemployment rate, will likely reinforce the Federal Reserve's recent signals against an immediate interest rate hike. The increase in labor force participation is an encouraging sign on the supply side, which could also contribute to easing price pressures. This data could influence market expectations for the Fed's monetary policy decisions in the near term.
