Breaking Down the September US Jobs Report

Labor Market & Economy - The report suggests the U S economy is "not too bad" but inflationary worries remain and the job market feels like it is softening [7] - Unemployment rate rose due to a large jump in the number of people looking for work, increasing the labor force significantly [3] - Weekly jobless claims are at 220,000, similar to levels at the beginning of October [6] - Difficulties adjusting for college graduates who haven't found work may be causing measurement problems in the labor force [4][5] Federal Reserve (The Fed) - The Fed's next move is uncertain, with arguments for both holding and cutting rates based on job creation, inflation, and unemployment rate [2] - Fed Governor Lisa Cook suggests monitoring how unexpected losses in private credit may spread to the broader U S financial system due to increased complexity and interconnections with leverage firms [7] - The Fed may be raising the issue of private credit risks to draw attention, as they lack supervisory ability in this area [14] Private Credit & Financial System Risks - Private credit has grown tremendously, particularly in areas where regulators lack oversight [9] - Concerns exist about interconnections among private lenders and potential contagion if borrowers default [9][11] - Key indicators to watch for stress in the financial system include default rates and the rate of fallen angels [11] - Private lending is primarily to private companies, making it difficult to get a complete picture of the credit world, but subprime loan interest rates may offer insights [12]