US economy added a whopping 254,000 jobs last month

 Stocks rose Friday as Wall Street cheered the US economy’s display of resilience.

The Dow rose 341 points, or 0.8%, to close at a fresh record high of 42,352.75. The S&P 500 gained 0.9% and the Nasdaq Composite added 1.2%. All three major indexes ended the week higher.

That comes after data Friday showed the economy added a whopping 254,000 jobs last month, blowing past economists’ estimates. The gangbusters figure has raised optimism on Wall Street that the economy will achieve a soft landing, or a scenario in which inflation comes down and there’s no recession.

Traders see a 96% expectation that the Federal Reserve will cut rates by a quarter point at its November policy meeting, according to the CME FedWatch Tool. That’s up from a 68% chance yesterday.

Investors are now shifting their attention to key inflation reports due next week. The Consumer Price Index and Producer Price Index reports are both on deck. Earnings season also kicks off next week, with big banks including JPMorgan Chase and Wells Fargo set to report quarterly results.President Joe Biden seized on two fronts of good economic news Friday — making his first appearance in the White House briefing room as president to celebrate a swift end to the port strike and a stronger-than-expected jobs report — and pushing back on critics who called the numbers fake.

“I’m going to be very careful here, but if you notice anything the MAGA Republicans don’t like they call fake,” Biden told reporters. “The job numbers are what the job numbers are. They’re real. They’re sincere.”

Biden said the healthy September jobs report showed the administration had proven critics wrong.

“The simple fact is, we’ve gone from economy in crisis to literally having the strongest economy in the world,” Biden said.

The president also congratulated the Union and port owners coming to an agreement that will keep East Coast and Gulf ports open, saying they had “averted what could have been come a major crisis for the country.”In addition to strong job gains and a boost in workers’ pay, September’s jobs report also showed that the jobless rate dropped as well, landing at 4.1% (unrounded 4.051%).

The retreat in the unemployment rate partly reverses an upward trend seen during much of the past year.

However, while the unemployment rate has marched higher, it hasn’t been entirely due to negative reasons, economists have said. Jobless claims (a proxy for layoffs) have increased but not spiked; and since the government’s measure of unemployment captures folks who are actively looking for a job, the jobless rate also includes new entrants and reentrants to the labor force.The mechanics for the unemployment rate dipping lower in September were as follows (as laid out by Michael Feroli, chief US economist at JPMorgan,

in a note issued Friday):

The household survey (one of two that feed into the monthly jobs report) showed a 430,000 increase in employment and a 281,000 decrease in the ranks of the unemployed, which was the largest decline since early 2022.

“All categories of the unemployed — job losers, leavers, new and reentrants — declined last month, and the flows from unemployed to employed last month was the highest since early 2022,” he wrote.When looking at the monthly jobs report, it’s important to keep in mind that data is volatile, it is fluid, and it will be revised as more comprehensive information becomes available.

“It’s difficult to get an accurate first-time read on the labor market, so we always want to have some healthy skepticism,” Josh Hirt, senior US economist at Vanguard, told CNN on Friday. “It is very common that these do get revised.”

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