The U.S. economy added fewer-than-expected jobs in September, wages were dormant and the unemployment rate held at 5.1 percent, illustrating the impact domestically of slowing global growth.
Data showed payrolls increased only 142,000 jobs last month, significantly below the 200,000 projected by analysts. Revisions for the prior two months painted an even bleaker picture, with August payrolls down to 136,000 from an initial read of 173,000. July was revised down as well, to 223,000 from 245,000. Over the past three months, job gains have average 167,000 a month.
"Ugly, really ugly, it's just hard to find anything good in the report," said JJ Kinahan, chief strategist at TD Ameritrade. "After last month we could all point to jobs, and say at least they are holding in there. The report is telling us the domestic economy is slowing."
Wages were flat in September, with average hourly earnings at $25.09, following a 9-cent gain in August. Hourly earnings have risen by 2.2 percent over the year. Average hourly earnings of private-sector production and non-supervisory employees were unchanged at $21.08 in September, the department said.
Stock futures erased gains and fell sharply in the wake of the report, and U.S. stock indexes followed suit after the market opened, only to change direction in the afternoon.
"When you miss these economic numbers, it's generally been good for the market," said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, of thinking disappointing reports keep monetary tightening by the Federal Reserve at bay. "But people are worried about the global slowdown, and with numbers like that, there are worries about domestic growth."
Market expectations -- as gauged by Fed futures funds -- in the past week have priced in the chances of the Fed raising interest rates in December at between 40 and 45 percent, with those odds only pulled lower by the jobs report.
"Now there is nothing [Fed officials] can point to for a good reason to raise," said Kinahan, who believes there is a low probability of the Fed lifting rates before the end of the year. "One report does not blow everything out of the water, but if you combine with things going on worldwide, it's one less thing."
Wren, however, still believes the Fed will bump rates higher in December, saying in an environment where the economy is growing at 2.5 percent, "interest rates should not be at zero."