September's jobs report came in below market expectations but was still enough to increase chances for a December interest rate hike.
Traders pushed the probability of a Fed move during its last meeting of the year from 63.9 percent before Friday's nonfarm payrolls release to 70.2 percent afterward, according to the CME's fed funds futures tracker. That move came even though the 156,000 increase was below market expectations for 176,000.
Each jobs report brings with it a fresh round of speculation about what the Federal Open Market Committee might do regarding rates. The committee last moved rates in December 2015, the first hike in more than nine years.
"Because (the September report is) slightly below expectations, there's a tendency to think, 'Oh, this is bad, this is a negative report,' and there's a tendency to link that with the FOMC's view on the economy and what they will do," said Bodhi Ganguli, lead economist at Dun & Bradstreet. "We do not plan to change our baseline forecast based on this report."
While the market boosted chances for a December move, it is now almost completely disregarding any possibility of a November hike.
The probability for a rate rise at the Nov. 1-2 meeting dropped from 14.5 percent Thursday to 10.3 percent after the jobs report.