Week ended Sept 5, 2025: jobs report ends week with a thud

As usual, this past week had some interesting sentiment drivers (mentioned briefly further down), but all that mattered by the end of the week was the August payrolls report released Friday before the U.S. open.  New jobs added in the month came in at a rather dismal 22,000, well below the 75,000 expected, and the unemployment rate increased slightly to 4.3%.  With prior months’ revisions, this continues a downward trend in the jobs market that will almost certainly ensure a 25bps reduction in the Fed Funds rate at the FOMC meeting week after next. 

As my readers know, I believe the “adult in the room” is the U.S. Treasury bond market.  Yields plummeted across the curve following the release of the jobs report on Friday, certainly welcome relief for investors in intermediate- and longer-term maturities bonds which – along with government bonds in many other countries – had been under severe pressure early in the week.  How stocks would react to the August payrolls report was a more difficult question, after the S&P 500 recorded another record high mid-week.   On one hand, stock investors can now be confident that the Fed will almost certainly lower its policy rate at the upcoming FOMC meeting, leading to lower borrowing costs for companies that rely on floating rate debt.  On the other hand, it should be clear by now that the US economy is slowing, and this could potentially have adverse follow-through effects on future corporate earnings and consumer confidence. 

I thought the Trump administration was strangely quiet on the jobs report, not terribly surprising in that the president’s on again, off again “tariff plan” and overall erratic economic policy approach continue to sow confusion and uncertainty, causing companies to defer investment and consumers to defer major purchases.  As much as Mr Trump should welcome the higher probability of the Fed moving towards an easing stance in monetary policy, he can ill-afford the U.S. economy going into the doldrums, or – even worse – the economy slowing alongside still-above-target inflation (which shows little sign of regressing towards the 2%/annum target rate).  I suppose he will try to pin this on the prior administration, as per usual, but the fact is that Mr Trump owns this economy now whether he wishes to acknowledge it or not. I will leave my commentary here for now, because risk markets are still pretty much “pedal to the metal” in spite of a growing litany of concerns on the horizon.

In other influential market news,

• Google (GOOG) largely escaped unscathed from a Justice Department decision that left the company intact, sending the company’s shares soaring (+10.1% WoW).

• Eurozone inflation increased slightly in August compared to July, almost ensuring that the ECB will not lower its policy rates at this week’s monetary policy meeting.

• French PM François Bayrou is facing a no confidence vote tomorrow in the National Assembly, likely to push the French government into further political turmoil. 

• OPEC+ agreed to increase production starting in October.

This week, the ECB has its monetary policy meeting (no change in policy expected), US CPI for September will be released mid-week (the last inflation read before the upcoming FOMC meeting), and Apple (AAPL) will announce its new products which – not surprisingly – include the iPhone 17.

Below are updated tables for the week ended September 5, 2025.  

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