Level 1 — Absolute Beginner
The United States has a new jobs report. It says employers added only 29,000 jobs in September. Experts thought it would be about 90,000.
The number of people without a job went up a little. It is now 4.2 percent. Last month it was 4.1 percent.
Many people on Wall Street feel happy about the weak report. They now think the central bank will not raise interest rates soon.
Stocks go up on Friday. Interest rates on government bonds go down.
- job
- work that you do to earn money
- employer
- a company or person that gives people work
- report
- a document that gives facts
- percent
- a part of one hundred
- stock
- a small piece of a company that people can buy
- interest rate
- the price of borrowing money
- central bank
- the bank that controls a country's money
- weak
- not strong
Level 2 — Elementary
The United States added only 29,000 jobs in September. Economists had expected about 90,000. The unemployment rate rose to 4.2 percent from 4.1 percent in August.
The report also changed the number for July. Now it shows the country lost about 10,000 jobs in that month, not gained jobs.
Investors liked the news in a strange way. A weak job market makes it less likely that the Federal Reserve will raise interest rates. Traders now see about a 20 percent chance of a rate hike in October. A week ago they saw 64 percent.
On Friday morning the Dow, the S&P 500 and the Nasdaq all rose. The 10-year Treasury yield fell to about 5.18 percent, and the price of Brent oil slipped below 100 dollars.
- economist
- an expert who studies money and business
- unemployment rate
- the share of workers who cannot find a job
- revise
- to change a number after new facts arrive
- investor
- a person who puts money into stocks or bonds
- Federal Reserve
- the central bank of the United States
- rate hike
- a rise in interest rates
- yield
- the money you earn each year from a bond
- Treasury
- the part of government that manages money
Level 3 — Intermediate
American employers added just 29,000 jobs in September, far short of the roughly 90,000 economists had forecast, and the unemployment rate edged up to 4.2 percent from 4.1 percent. A downward revision also turned July into a month of net job losses, with about 10,000 positions disappearing instead of being created.
Wall Street read the bad news as relief. A cooling labour market reduces the pressure on the Federal Reserve to raise interest rates again, and futures markets now put the odds of a quarter point increase in October at about 20 percent, compared with 24 percent a day earlier and 64 percent a week ago.
The Dow, the S&P 500 and the Nasdaq all climbed in early trading, with the technology-heavy Nasdaq leading. Treasury yields retreated, with the 10-year at about 5.18 percent and the 2-year, which is most sensitive to the Fed, down six basis points to roughly 4.73 percent. Brent crude also slipped below 100 dollars a barrel, easing worries about inflation.
The episode shows how stubborn this economy has become: inflation fears and a weakening labour market now pull the Fed in opposite directions.
- forecast
- to predict what will happen
- revision
- a change made to a number after new evidence
- net
- the final amount after everything is counted
- futures market
- a market where traders bet on future prices or events
- basis point
- one hundredth of one percentage point
- sensitive
- quickly affected by a change
- ease
- to make a problem less severe
- stubborn
- hard to change or solve
Level 4 — Advanced
The American labour market sputtered in September, adding a mere 29,000 positions against a consensus of roughly 90,000, while unemployment ticked up to 4.2 percent from 4.1 percent. A downward revision compounded the disappointment by recasting July as a month of net contraction, with about 10,000 jobs lost rather than gained.
Paradoxically, equities rejoiced. Weak hiring eases the case for another Federal Reserve rate increase, and bond traders trimmed the implied odds of a quarter point hike in October to roughly 20 percent, down from 24 percent the previous day and 64 percent a week earlier.
The reaction rippled across assets. The Dow, the S&P 500 and the Nasdaq all advanced in early trading, the 10-year Treasury yield retreated to about 5.18 percent, the policy-sensitive 2-year slid six basis points to roughly 4.73 percent, and Brent crude dipped below 100 dollars a barrel, loosening the inflationary vise at least for a session.
Yet the relief is conditional. A central bank facing both stubborn price pressures and a faltering jobs market has little room for error, and one soft payrolls print does not settle whether the next move is a pause, a hike or, eventually, a cut.
- sputter
- to work in a weak and uneven way
- consensus
- the general view or forecast of a group of experts
- contraction
- a period of shrinking
- compound
- to make a bad situation worse
- paradoxically
- in a way that seems to contradict itself
- equities
- company shares traded on a stock market
- implied
- suggested by the facts, though not stated directly
- payrolls
- the total number of paid workers, or a report on it
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