The sign of the United States Department of Labor on Constitution Avenue in Washington, with the Frances Perkins Building behind it under a blue sky, in February 2025 · G. Edward Johnson, via Wikimedia Commons · CC BY 4.0

Study · FIVE · 2026-10-02 · 8 min read · Treasuries, the Fed and housing finance · World and macro

Job growth slows to 29,000 and the ten-year turns down

The Labor Department counts 29,000 more jobs in September and 60,000 fewer in July and August than it first reported, with unemployment at 4.2 percent and pay up 0.1 percent in the month; the ten-year, which closed Wednesday at 5.29 percent, above any close since May 2002, closed Thursday at 5.24, and Freddie Mac's survey put the 30-year mortgage at 7.28 percent, the highest since November 2023, a week before $119 billion of Treasury auctions.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

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What changed since chapter four

Chapter four closed on Tuesday's table and on a revision that took three tenths of a point off inflation. Wednesday's table, published by the Treasury on the evening of 30 September, reads: two-year 4.88 percent, three-year 5.00, five-year 5.09, seven-year 5.19, ten-year 5.29, twenty-year 5.68, thirty-year 5.64. The Treasury's back tables date the levels. The ten-year's 5.29 is above the 5.26 of 12 June 2007, the highest close of that year, and no close had been as high since 14 May 2002, at 5.32; the thirty-year's 5.64 equals its close of 13 July 2001. From the last table of August to the last of September, the two-year and the ten-year each ended 0.54 of a point higher. ^{[1, 2, 3, 4, 19]}

Thursday began with more selling and ended with less. Reuters reported from London that borrowing costs from the United States to France, Britain and Japan had reached their highest in decades, and that the ten-year Treasury yield 'rose to 5.34%, its highest since 2002'. By the close it had turned: Thursday's table has the two-year at 4.78 percent, a tenth of a point below Wednesday, the ten-year at 5.24 and the thirty-year at 5.61. Mortgage News Daily reported that its daily index of the 30-year fixed mortgage rate went from 7.60 percent to 7.54, writing that rates 'actually moved lower today by more than a token amount'. ^{[9, 1, 10]}

Thursday's other figures pointed two ways. The Institute for Supply Management's survey of factory purchasing managers put its main index for September at 54.5 percent, a tenth below August and a ninth month of expansion (above 50 means more of them reported growth than decline), and its prices index at 77.9 percent, 'a notable increase of 6.8 percentage points', which the report says returns it to its level at the start of the Iran War. New claims for unemployment benefits were 197,000 in the week to 26 September, 1,000 fewer than the week before, Reuters reported. Freddie Mac's weekly survey put the 30-year fixed mortgage at 7.28 percent, from 7.03 a week earlier and 6.34 a year earlier; by the survey's own history that is the highest since 22 November 2023, and the quarter-point rise is the largest in one week since 13 October 2022. ^{[11, 12, 13]}

Then Friday's employment report. The Bureau of Labor Statistics counted 29,000 more jobs on employers' payrolls in September, against an average gain of 45,000 a month over the previous year, and said employment 'in all major industries changed little over the month'. It revised the summer down: July from a gain of 21,000 to a loss of 10,000, and August from 162,000 to 133,000, so the two months hold 60,000 fewer jobs than first reported. The unemployment rate, which comes from a separate survey of households, was 4.2 percent, inside the range of 4.1 to 4.3 percent it has held since March. Average hourly pay went up 5 cents, or 0.1 percent, to $37.81, and was 3.0 percent higher than a year earlier. ^[5]

The forecasts had been higher. A Reuters poll put September at 90,000 jobs, with estimates from 35,000 to 180,000, and the unemployment rate at 4.1 percent; NBC News reported a Dow Jones survey at 84,000. On Thursday night, before the report, Reuters wrote that financial markets priced 'a roughly 28% chance' of a further rate increase at the Fed's meeting of 27 and 28 October, down from about 69 percent a week earlier. After it, the economist Mohamed El-Erian told Yahoo Finance that the report was 'weak across the board when it comes to the demand for labor', and that 'this is going to not just lower yields, as you said, but it's also going to put the Fed definitely on hold for October'. ^{[6, 7, 8]}

The record

The decision these numbers bear on is the statement of 16 September, which raised the Fed's target range 'by 1/4 percentage point to 3-3/4 to 4 percent' by a vote of 12 to 0 and said: 'Job gains have kept pace with the workforce, and the unemployment rate has changed little.' Friday's report is the first since that statement, and it lowers the two months that were on the record when the statement was written, July and August. Every yield on Thursday's table is still above the top of the range, from 4.06 percent at one month to 4.44 at one year. ^{[14, 5, 1]}

Two governors spoke in the days before the report. Lisa Cook said on Wednesday that 'the fact remains that inflation has been too high for too long', that it 'has exceeded the Fed's 2 percent target for more than five years', and that she voted with the rest of the committee to raise rates in September. Michael Barr said on Tuesday: 'In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.' The New York Fed's president, quoted in chapter four, said the same day as Barr that there is 'no need for urgency'. ^{[15, 16, 19]}

The Treasury set next week's sales on Thursday: $58 billion of three-year notes on Tuesday 6 October, $39 billion of ten-year notes on Wednesday 7 October and $22 billion of thirty-year bonds on Thursday 8 October, $119 billion in three days by the desk's arithmetic. The ten- and thirty-year sales add to issues first sold in August, whose coupons, the interest printed on the security, are 4-5/8 and 5-1/8 percent; Thursday's table has both maturities yielding more than that. ^{[17, 1]}

Companies borrow in the same market. Paramount Skydance said on Monday 28 September that it intends to offer approximately $44.4 billion of secured notes to help pay for Warner Bros. Discovery, and that the notes' principal amounts, interest rates and maturities are among the terms still subject to conditions. ^[18]

Who it reaches

The same fourteen filers as chapter four, and one more: the builders, whose buyers meet a survey rate a quarter point higher than a week ago; the lenders, whose volume follows it; the banks, whose lending margin the curve sets; the mortgage trusts, whose holdings are priced off it; Tesla, a borrower on floating rates; and Paramount Skydance, with notes to sell. Thursday changed the table's shape as well as its level: the short end came down more than the long end, so the thirty-year stood 0.83 of a point above the two-year, from 0.76 on Wednesday, 0.70 on Tuesday and 0.64 on Monday. This chapter prints no share price. ^{[13, 1, 18, 19]}

Friday's report reaches two of those groups in its own lines. Construction added 11,000 jobs in September, against an average of 10,000 a month over the year before. Financial activities, the industry of the banks, the lenders and the insurers, lost 7,000 jobs and stand 129,000 below their peak of May 2025, most of that loss at insurance carriers, by the bureau's count. ^[5]

Where the sources disagree

On what was expected. Reuters' poll had 90,000 jobs and the Dow Jones survey that NBC News reported had 84,000; both had unemployment at 4.1 percent, and the Dow Jones survey had pay 3.1 percent higher than a year earlier, where the bureau found 3.0. The 29,000 is below even the lowest estimate in Reuters' range, 35,000. ^{[6, 7, 5]}

On the level. Reuters' 5.34 percent on Thursday was a quote taken during trading; the Treasury's own closes were 5.29 on Wednesday and 5.24 on Thursday. By the Treasury's back tables the last close at or above 5.34 was 2 April 2002, at 5.36, so Thursday's quote did not become a close. Friday's own close comes in the evening's table. ^{[9, 1, 3]}

On the cause of Thursday's turn. Timothy Graf of State Street told Reuters that morning: 'I don't think there's a specific trigger', and that French government bonds 'are getting beaten up because it's budget time and it's messy'. A report on gold carried on Yahoo Finance's market page said instead that yields eased 'as concerns over France's fiscal outlook fueled demand for safe-haven assets'. Mortgage News Daily listed several possible factors and wrote that none of them 'stand out as an obvious singular motivation'. Fred Neumann of HSBC, in the same Reuters column, put the longer climb in yields on deficits and 'enormous funding demand from the AI sector'. ^{[9, 20, 10]}

On how to read the report. El-Erian called the rise in the share of adults in the labor force, 'from 61.6 to 61.8', a 'pop'; the bureau says the participation rate 'changed little'. And the week's figures still point two ways: the factory survey's prices index went up 6.8 points in a month while the bureau's pay figure grew 0.1 percent. The officials differ in the same way: Barr's base case is that further adjustments are likely to be needed, where the New York Fed's president saw no need for urgency and El-Erian, after the report, sees the Fed on hold in October. ^{[8, 5, 11, 16, 19]}

What settles it next

Friday's own table, which the Treasury publishes in the evening. The auctions of 6, 7 and 8 October. Freddie Mac's next weekly survey, on Thursday 8 October. The Fed's meeting of 27 and 28 October, and the Bureau of Economic Analysis's next release on income and prices on the morning of 29 October. The employment report for October, which the bureau has scheduled for Friday 6 November; NBC News noted that Friday's report was the last before the midterm elections. Chapter six opens on the first of these to move the table. ^{[1, 17, 13, 6, 19, 5, 7]}

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

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