U.S. jobs show a soft underbelly as much-delayed September data trickles out and consumer confidence falls. Weak hiring in manufacturing, transportation and temporary help contrasts with gains concentrated in health care and leisure. AI, tariffs, and slower holiday spending are reshaping employer plans. This matters now because fresh November confidence readings and September retail and wholesale price data arrive ahead of the next trading session.
Market snapshot ahead of the session
Traders will open with several fresh data points on the table. The delayed September reports showed retail sales up a modest 0.2 percent and wholesale inflation, measured by the Producer Price Index, rising 0.3 percent. A separate confidence reading for November fell nearly seven points, taking consumer mood back to levels seen when tariffs were first imposed in April.
Those signals point to mixed demand pressure. Retail sales excluding gasoline were flat in September. Gasoline spending rose two percent that month and contributed importantly to headline retail strength. At the same time, goods prices accounted for most of the PPI uptick, the largest monthly jump in goods inflation since February 2024. Markets will weigh whether inflation momentum is broadening or still concentrated in energy and select goods.
On the policy front, comments from Treasury Secretary Scott Bessent that a new Federal Reserve chair could be chosen by Christmas add a political timing element to the session. Market participants will watch for volatility tied to any commentary about the Fed’s role and the likely tone of the next chair.
Labor market cracks and sector-level implications
The headline employment picture masks important sector divergence. Overall payrolls were up 0.8 percent for the 12 months ended in September. Yet much of that growth came from health care and social assistance and leisure and hospitality. Those two sectors together accounted for more than 100 percent of net job gains in 2025. Excluding them, employment fell by about 6,000 jobs in the first nine months.
Manufacturing payrolls were down 0.7 percent year over year. Temporary help employment has declined three years in a row and was down roughly 3 percent. Transportation and warehousing and wholesale trade both added jobs at rates below overall growth, 0.6 percent and 0.2 percent respectively. That pattern points to weaker cyclical demand and could be a constraint on industrial and transport names during the trading session.
Market participants noted commentary that companies appear hesitating to expand payrolls while new productivity tools arrive. Rick Rieder, chief investment officer for global fixed income at BlackRock (NYSE:BLK), described the environment as a hiring pause in anticipation of AI. That dynamic can change the composition of winners and losers across equity sectors and influence risk appetite for the day.
Consumer spending, sentiment and holiday season outlook
Retail sales data suggest consumers slowed in September before the holiday period. The headline 0.2 percent increase followed a 0.6 percent gain in August. Excluding gas, sales were flat. Categories with notable gains included restaurants and general merchandise. E-commerce and electronics showed declines that month, and hobby stores posted the largest monthly drop in the released categories.
Consumer confidence slid sharply in November according to the Conference Board. Written comments from consumers continued to call out prices and tariffs as principal concerns. Expectations for household income and labor market conditions turned more negative for mid-2026. Stocks tied to consumer discretionary demand may be more sensitive to that sentiment shock as the trading session unfolds.
Inflation components and market rate implications
Producer prices rose 0.3 percent in September after a 0.1 percent decline the prior month. The increase largely reflected goods such as energy, meats and autos. A near-term rebound in goods inflation creates a more complex backdrop for fixed income markets. If investors interpret the PPI acceleration as a sign that inflation is not uniformly cooling, yields may adjust to reflect higher uncertainty about the path of prices.
At the same time, softer hiring in cyclical sectors could cap inflation pressures from wage growth in those areas. The mix of stronger prices in goods and softer employment in cyclical labor markets is likely to produce divergent market responses across rates, credit and equity sectors during the session.
Global and policy context for traders
From a global perspective, U.S. data have ripple effects. Softer U.S. cyclical hiring can weigh on global goods demand and commodity-exposed emerging markets. European markets, already sensitive to inflation and growth tradeoffs, will watch U.S. inflation readings for signals about rate differentials. Asian economies that are exporters of manufactured goods will pay attention to the manufacturing employment trends and the retail spending pattern in the United States.
The political timeline for the Fed chair selection adds another variable. Treasury commentary that the Fed should step back from frequent commentary feeds a debate about central bank communication and market expectations. Any confirmation of a near-term chair decision is likely to alter tone in rates and risk assets during the trading session.
Trading session themes and scenarios to watch
Traders should monitor several cross-market linkages. First, mobility and transport data will be watched relative to the muted hiring in transportation and warehousing. Second, retail and consumer confidence will inform expectations for holiday season demand. Third, PPI details on goods and energy will be parsed for signs of persistent inflation that could complicate the Fed narrative.
Finally, technology-driven capital spending, specifically data center and AI investment that has helped GDP, remains a backdrop for equity performance even as it has not translated into broad-based hiring. That disconnect is a key theme for the session because it affects corporate earnings outlooks and sector rotations without offering a simple directional trade.
Overall, the session is likely to feature cautious tone in cyclical names, targeted strength in sectors tied to health care and hospitality, and active positioning in rates as investors reconcile mixed inflation signals with uneven labor market data.
