The jobs report showed the United States added 130,000 jobs last month
, missing expectations and providing further evidence of a slowdown in hiring. Private payrolls grew at the weakest pace since May.
Wage growth, however, grew 3.2% from a year ago. And the unemployment rate held steady at 3.7%, near the lowest level in the past 50 years.
Investors bid safe-haven bonds higher after the report. The 10-year Treasury yield declined to 1.56%, compared with 1.6% before the jobs report. Gold prices also rose, up 0.5% at 1,523.20 an ounce.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the jobs report “ominous” and weaker than the headline suggests.
“The trend is softening, as firms scale back hiring plans alongside capital spending, in the face of prolonged and deep uncertainty,” Shepherdson wrote in a note to clients.
Stocks have closed higher over the past two sessions, logging their best day in three weeks on Thursday amid optimism over US-China trade relations. Washington and Beijing are set to return to the negotiating table in October.
The jobs report probably won’t derail expectations of further interest rate cuts.
The Federal Reserve first cut rates in July to boost the economy. Expectations for a quarter percentage point cut at the September 18 meeting are at 91%, according to the CME’s FedWatch tool.
A speech by Fed Chairman Jerome Powell at 12:30 p.m. ET is also on the calendar Friday.
“He will likely underscore the mounting trade policy risks to the outlook, at a time when inflation is already shy of the target, global and domestic economies are slowing, and US manufacturing is contracting,” said Priscilla Thiagamoorthy, economic analyst at BMO, in a note.
“Powell has a habit of putting his foot in his mouth, so it will be interesting to see what he’ll say about this report,” Michael Arone, Chief Investment Strategist at State Street Global Advisors.