Markets explained · US jobs report
Bad news on US jobs. So why did shares go up?
America hired far fewer people in September, yet the stock market rose the same day. Here's the reason, one step at a time.
New US jobs in September
Down from 133,000 in August.
US shares the same day
The S&P 500, a list of 500 of America's biggest companies.
Words with a gold underline explain themselves when you tap them.
Step 1 of 6
Hiring slowed sharply
Every month the US government counts how many new jobs were created. In August the figure was 133,000. In September it was 29,000, less than a quarter as many.
New jobs added in the US
August is the revised figure. Bars are drawn to the same scale.
The also edged up to 4.2%.
Fewer jobs sounds like bad news for companies. Look at what shares did.
Step 2 of 6
Shares went up anyway
A is a small slice of a company. When investors feel better about the future they pay more for shares, and prices rise. On Friday the two best-known lists of American shares both climbed.
How far shares rose on the day
Moves just after midday on Friday 2 October 2026.
The explanation starts with interest rates.
Step 3 of 6
Meet the Fed, which sets the cost of borrowing
The , known as the Fed, is America's central bank. It sets , which are the price of borrowing money. Prices in the shops have been rising faster than the Fed wants (that's ), so on 16 September it raised rates.
Higher rates work like brakes. Loans cost more, people and companies spend less, and prices stop rising so quickly. The downside is that the same brakes slow down hiring and company profits.
The Fed's interest rate
Columns start at 0% and show the top of the Fed's target range, which rose by 0.25 percentage points.
Investors feared the Fed would brake again in October.
Step 4 of 6
Weak hiring makes another rate rise less likely
The Fed has two goals: steady prices and plenty of jobs. When hiring is already slowing, braking harder could cost even more jobs. So after the report, traders lowered the odds of another rate rise in October.
Chance of a rate rise in October
The odds that traders' prices implied on Friday.
Rates haven't fallen. Markets still put the chance of higher rates by the end of the year at roughly 86%. All that changed on Friday is that the next rise looks less urgent.
Why would that lift shares? Two reasons.
Step 5 of 6
Lower rates make future profits worth more today
Buying a share means paying today for a company's profits in the years ahead. Money that arrives later is worth less than money in your hand, because you could have earned interest while you waited. The more investors can earn elsewhere, the less they'll pay today.
£100 arriving in five years
The £100 never changed. Only the rate did. A simplified example: these are the returns investors ask for, which are separate from the Fed's own rate.
It also protects profits
Companies borrow money, and so do their customers. If rates stop climbing, borrowing stops getting more expensive and people keep spending. That helps the profits investors are paying for.
So is bad jobs news always good for shares? No.
Step 6 of 6
The catch: weak jobs news pulls shares two ways
Fewer jobs can bring relief about interest rates. It can also mean people have less money to spend, which hurts company profits. Shares go whichever way is heavier.
Try it: what if hiring…
Why Friday looked mild
The unemployment rate has stayed between 4.1% and 4.3% since March. That isn't a collapse.
What could tip it the other way
Earlier months were marked down too. July now shows -10,000 jobs, so September wasn't a one-off.
The short version
Bad news can be good news, up to a point
This only holds while the slowdown stays mild. If companies start earning a lot less, the same kind of news sends shares down.