September jobs report is the market’s next big test

Economists expect U.S. job growth to have slowed in September while unemployment holds near 4.1%, a report that could determine whether the Federal Reserve pauses after its latest rate increase.

The release arrives after a week in which Treasury yields surged and borrowing costs again became the dominant market story. A softer hiring number without a jump in unemployment would strengthen the case for the Fed to wait before tightening again.

For households and businesses, the transmission is straightforward: the jobs number can move Treasury yields quickly, which then filters into mortgage rates, corporate borrowing and equity valuations.

What to watch: payroll growth, revisions to prior months, wage growth and the unemployment rate. The headline number matters, but the revisions and wage data will tell more about whether labor demand is truly cooling.