World Economy

Fed Rate Hike Odds Collapse After Weak September Jobs Data

Probability of a Federal Reserve rate increase in October has plummeted following September's disappointing employment report. The economy added only 29,000 jobs last month, substantially below the 80,000-job forecast. Market pricing now shows just a 17% chance of a quarter-point rate hike in October, down from nearly 70% a week earlier. The softer labor data arrives after a cooler-than-expected inflation reading Wednesday, with core personal consumption expenditures rising 3% in August. Economists say the data supports patience from policymakers as the labor market shows neither sharp deterioration nor meaningful strengthening. Despite October's dimmed prospects, traders maintain above 75% odds for a December rate increase. The Fed last raised rates at its September meeting to combat inflation persisting above target for five years.