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WASHINGTON, Oct 4 (Reuters) - U.S. job gains increased by the most in six months in September and the unemployment rate fell to 4.1%, pointing to a resilient economy that likely does not need the Federal Reserve to deliver large interest rate cuts for the rest of this year.In addition to the bigger-than-expected increase in nonfarm payrolls reported by the Labor Department on Friday, wages rose at a solid pace last month. The closely watched employment report also showed the economy added 72,000 more jobs in July and August than previously estimated. The report followed on the heels of annual benchmark revisions to national accounts data last week that showed the economy is in much better shape than previously estimated, with upgrades to growth, income, savings and corporate profits.This improved economic backdrop was acknowledged by Fed Chair Jerome Powell this week when he pushed back against traders' expectations for another half-percentage-point rate cut in November, saying "this is not a (policy-setting) committee that feels like it is in a hurry to cut rates quickly." "Today's report reinforces the broad resilience theme for the U.S. economy, pushing aside concerns of an imminent deterioration in labor market conditions," said Jonathan Millar, a senior economist at Barclays. "We maintain our call for a 25 basis points cut in November."Nonfarm payrolls increased by 254,000 jobs last month, the most since March, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would rise by 140,000 positions after advancing by a previously reported 142,000 in August.Estimates for September's job gain ranged from 70,000 to 220,000. The three-month average of monthly job growth increased to 186,000 from 140,000 in August.The share of industries reporting an increase in payrolls jumped to 57.6% from 51.8% in August.The flow of strong data, including consumer spending, since the U.S. central bank kicked off its policy easing cycle with an unusually large 50 basis points rate reduction last month, had some economists wondering if policymakers had panicked."If the Fed had known the revisions to the July and August prints in advance, it is very likely that they would have gone for a 25 basis points move instead," said Kyle Chapman, FX markets analyst at Ballinger Group.The dollar rallied to a seven-week high against a basket of currencies. Stocks on Wall Street were mostly higher. U.S. Treasury yields rose.Financial markets boosted the odds of a quarter-percentage-point rate reduction in November to 95% from 71.5% before the report, CME Group's FedWatch tool showed. The odds of a 50-basis-point cut were almost wiped out.The Fed cut its policy rate by 50 basis points last month to the 4.75%-5.00% range, its first rate reduction since 2020. It hiked rates by 525 basis points in 2022 and 2023.A column chart titled "Monthly change in US jobs" that tracks the metric over the past year. Employers added 254,000 jobs in SeptemberA column chart titled "Monthly change in US jobs" that tracks the metric over the past year. Employers added 254,000 jobs in SeptemberMUDDY OCTOBER OUTLOOKBut the labor market could experience some brief turbulence after Hurricane Helene devastated large swathes of the U.S. Southeast last week. Tens of thousands of machinists at Boeing (BA.N), also went on strike in September, with ripple effects on the aerospace company's suppliers.The strike, if it persists beyond next week, could dent the nonfarm payrolls data for October, which will be released just days before the Nov. 5 U.S. presidential election.Voters have been mostly concerned by inflation, though price pressures have abated considerably after surging in 2022.Robust employment gains last month defied weak labor market sentiment in the Institute for Supply Management and Conference Board surveys. Hiring at restaurants and bars, which increased by 69,000 jobs, lead the nearly broad rise in payrolls.The healthcare sector added 45,000 positions, driven by home healthcare services, hospitals as well as nursing and residential care facilities.Government employment increased by 31,000 jobs, lifted by state and local government hiring. Social assistance payrolls rose by 27,000 jobs. Construction employment advanced by 25,000 positions, reflecting solid gains in nonresidential specialty trade contractor jobs.Retailers added 15,600 jobs, many of them at supermarkets and drugstores. There were also job gains in professional and business services as well as financial activities.But manufacturing shed 7,000 jobs, concentrated in the motor vehicle industry. Transportation and warehousing lost 8,600, the bulk of them at warehouses and storage facilities.SOLID WAGE GAINSStronger hiring and low layoffs combined to lift average hourly earnings, which rose 0.4% after gaining 0.5% in August. Wages increased 4.0% on a year-on-year basis after climbing 3.9% in August. The average workweek, however, slipped to 34.2 hours from 34.3 in the prior month. Economists were not worried about rising wages re-igniting inflation.Still, they argued against another half-percentage-point rate cut at the Fed's Nov. 6-7 meeting. Policymakers will have October's report, which is likely to be muddied by Helene and the Boeing strike, in hand for that meeting."We do not see the firming in September as a risk to derailing the current downward trend in inflation," said Michael Pugliese, a senior economist at Wells Fargo. "The underlying trend in the labor market still seems to be toward gradual cooling, and a pickup in productivity growth further tempers the inflationary pressures emanating from the labor market."A bar chart that tracks the average hourly earnings over the past 13 months. The pay for full-time wage and salary workers in the US rose by 0.4% in September.A bar chart that tracks the average hourly earnings over the past 13 months. The pay for full-time wage and salary workers in the US rose by 0.4% in September.Details of the household survey from which the unemployment rate is derived were equally upbeat, though 121,000 more people were working multiple jobs. The drop in the unemployment rate from 4.2% in August reflected an increase of 430,000 jobs in household employment, which more than absorbed the 150,000 people who entered the labor force.The jobless rate has jumped from 3.4% in April 2023, in part boosted by those aged 16 to 24 and a rise in temporary layoffs during the annual automobile plant shutdowns in July.It has now declined for two straight months. The employment-to-population ratio, viewed as a measure of an economy's ability to create employment, rose to 60.2% from 60.0% in August. Fewer people worked part-time for economic reasons."The labor market is finding its steady state after a noisy few months," said Oscar Munoz, chief U.S. macro strategist at TD Securities.Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Paul Simao and Andrea Ricci

Blowout US employment report reinforces economy's resilience

NEW YORK, Oct 4 (Reuters) - A high-stakes corporate earnings season kicks into gear next week, with bullish investors hoping results will justify increasingly rich valuations in a U.S. stock market near record highs.The case for strong U.S. economic growth got a boost on Friday, after labor market data came in far above expectations. The S&amp;P 500 is up 20% year-to-date and stands near record highs despite recent tumult spurred by rising geopolitical tensions in the Middle East. A key test for the rally will arrive as corporate results begin rolling in next week. Companies need to post healthy profit growth and strong outlooks for next year to sustain valuations that have crept up in recent months: At 21.5 times future 12-month earnings estimates, the S&amp;P 500 is trading near its highest level in three years and is well above its long-term average of 15.7, according to LSEG Datastream. "One of the few rationales that the bulls can make for these lofty (valuation) multiples is that earnings growth keeps coming in at high levels," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. "With prices having run up, you really do need that earnings growth to come in probably at much better than expected levels."S&amp;P 500 earnings are expected to have climbed 4.7% in the third quarter from a year earlier, UBS equity strategists said in a report on Wednesday. However, earnings likely grew 8.5% when factoring in the historical rate of positive earnings surprises, the UBS strategists said.Such profit beats may be needed to fuel more gains in stocks. Since 2010, the S&amp;P 500's total return has closely tracked the increase in company earnings and dividends, according to Jack Ablin, chief investment officer at Cresset Capital. But the index has run ahead since early 2023, and is now about 18% above expected levels, based on current earnings and dividends, Ablin found."The market's a little bit over its skis here," Ablin said. "It's certainly anticipating some pretty strong earnings and dividend growth."Data on U.S. consumer prices due next week will give investors another snapshot of the economy. A stronger than expected number, on the heels of Friday's jobs data, could further curtail expectations for how much the Federal Reserve is expected to cut rates in coming months.Futures tied to the fed funds rate on Friday showed pricing of a 50 basis point cut at the Fed's November meeting falling to 5%, from over 30% on Thursday, according to CME FedWatch.BANKS IN SPOTLIGHTMajor financial firms highlight next week's earnings reports, with JP Morgan Chase (JPM.N), opens new tab, Wells Fargo (WFC.N), opens new tab and BlackRock (BLK.N), opens new tab due on Oct 11.Bank results offer an important view into the economy, including the state of delinquencies and loan demand, said Bryant VanCronkhite, senior portfolio manager at Allspring Global Investments.More broadly, VanCronkhite will be looking for signs that the Fed's initial 50-basis point cut - delivered at its monetary policy meeting last month - is already having an effect on the economy through such channels as rising auto sales and other big ticket purchases.Ideally, such activity will be sustained even if expectations for further rate cuts fall further following Friday's strong jobs report. Following the first rate cut, companies ideally will show leading demand indicators are strengthening, VanCronkhite said. "That would probably give me confidence that we're heading more towards that soft landing," he said. Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili and David Gregorio

Wall St Week Ahead Investors look to earnings to support record-high stock prices

NEW YORK, Oct 4 (Reuters) - The dollar jumped to a seven-week high on Friday and was on track to post its best week since September 2022 after a surprisingly strong jobs report for September led traders to cut bets that the Federal Reserve will make further 50-basis-point rate cuts.The greenback was also set for its best weekly percentage performance against the Japanese yen since 2009 as traders adjusting for a less dovish Fed and a more dovish Bank of Japan sparked a rapid repricing in the currency pair. U.S. nonfarm payrolls increased by 254,000 jobs last month, beating the 140,000 new jobs that economists polled by Reuters had anticipated.The unemployment rate also unexpectedly slipped, to 4.1% from 4.2% in August.It is a "blockbuster payrolls report by any measure. I think a no-landing scenario for the U.S. economy has suddenly become far more plausible," said Karl Schamotta, chief market strategist at Corpay in Toronto. "The expectation now would be for a Federal Reserve that treads far more cautiously in easing policy,” Schamotta said.Improving economic data and more hawkish comments from Fed Chair Jerome Powell on Monday, when he pushed back against expectations of continuing hefty rate cuts, led traders to reduce bets on a 50-basis-point reduction at the Fed's next meeting, on Nov. 6-7.Those odds were completely wiped out after Friday's data. Traders are now pricing in no chance of a 50-basis-point rate cut, down from around 31% earlier on Friday and 53% a week ago, the CME Group's FedWatch Tool shows. A 25-basis-point reduction is seen as almost certain, with traders also seeing a small chance that the Fed will leave rates unchanged.As for portfolio construction, you know, on the equity side, I really want to do anything but get too defensive here, you know, we have soft landing as our base case we think economic growth is strong earnings.Bank of America expects the Fed to cut rates by 25 basis points per meeting through March 2025, followed by reductions of 25 basis points each quarter until the end of 2025, BofA US economist Aditya Bhave said in a report on Friday."The data flow since the Fed's decision to cut by 50bp in September has been remarkably positive," he said, calling Friday's report "A-plus."Chicago Fed President Austan Goolsbee called the data "superb" and said more labor market data along those lines would boost his confidence the economy is at full employment with low inflation.The dollar index reached 102.69, the highest level since Aug. 16, and was on track for its best weekly percentage gain since September 2022.The euro slipped to $1.09515, the lowest since Aug. 15.The dollar gained to 149.02 yen , the highest since Aug. 16.New Japanese premier Shigeru Ishiba stunned markets this week when he said the economy was not ready for further rate hikes, an apparent about-face from his previous support for the Bank of Japan's unwinding decades of extreme monetary stimulus.The dollar has also been boosted this week by safe-haven demand on concerns about widening conflict in the Middle East.Supreme Leader Ayatollah Ali Khamenei said on Friday that Iran and its regional allies will not back down. Iran raised the stakes when it fired missiles at Israel on Tuesday, partly in retaliation for Israel's killing of Hezbollah secretary general Sayyed Hassan Nasrallah.Sterling fell as low as $1.3070, the lowest level since Sept. 12.Bank of England chief economist Huw Pill said on Friday the British central bank should move only gradually with cutting interest rates, a day after the pound slumped 1% after Governor Andrew Bailey said the BoE could move more aggressively to lower rates. In cryptocurrencies bitcoin rose 1.95% to $61,958. Reporting by Karen Brettell; additional reporting by Medha Singh and Ankur Banerjee; editing by Mark Heinrich, Susan Fenton and Leslie Adler

Strong jobs report propels dollar to best week since 2022

European shares close up as bumper US jobs data quashes growth worries

China’s commerce ministry said on Wednesday it has asked the World Trade Organization (WTO) to rule on Canada’s imposition of steep tariffs on Chinese electric vehicles as well as steel and aluminum products.Following the lead of the United States and European Union, Canada began imposing on Tuesday a 100% levy on EVs shipped from China, having also announced in late August a 25% tariff on Chinese steel and aluminum products.“China has raised a litigation to the WTO over Canada’s unilateral and trade protectionist measures, and will conduct anti-discriminatory probe into these restrictive measures,” the ministry said in a statement.The ministry repeated its strong opposition to the tariffs, which it says will “disrupt and distort global industrial and supply chain.”(By Chen Aizhu; Editing by Shri Navaratnam)

China files appeal to WTO on Canada’s tariffs on EVs, metal products

S&P 500, Nasdaq edge up after strong jobs data boosts market confidence

Chilean state-run miner Codelco has signed a letter of intent with Swedish-Swiss technology company ABB to explore a collaboration focused on decarbonizing and automating its operations, the copper giant said in a statement Friday.The strategic collaboration between both companies would be a long-term one, Codelco said, with the aim of identifying the miner’s innovation needs to pursue its commitments to sustainable development.(By Daina Solomon and Aida Pelaez-Fernandez; Editing by Gabriel Araujo)

Codelco signs letter of intent to collaborate with ABB on decarbonization

Russian aluminum producer Rusal plans to double the capacity of its Boguchansky aluminum smelter in Siberia to 600,000 metric tons by 2030, the local government in the Krasnoyarsk region, where the plant is located, said on Friday.Rusal, the world’s largest aluminum producer outside China, launched the first production line at Boguchansky in 2019. The plant is jointly owned with the state-controlled power generating company Rushydro.The local government’s statement quoted Rusal vice president, Elena Bezdenezhnykh, as saying that construction work at Boguchansky will start in 2025.Rusal, which accounts for 5.5% of global aluminum output, operates 11 smelters with a combined capacity of 4.6 million tons. The company did not respond to a request for comment.(By Anastasia Lyrchikova and Gleb Bryanski; Editing by Louise Heavens)

Rusal plans to double Boguchansky smelter capacity by 2030

TORONTO, Oct 4 (Reuters) - Canadian economic activity rebounded in September after contracting in the prior month as the pace of price increases cooled to its slowest in six months, Ivey Purchasing Managers Index (PMI) data showed on Friday.The seasonally adjusted index rose to 53.1 from 48.2 in August. A reading above 50 indicates an increase in activity. August's reading was the first move below the 50 no-change threshold in 13 months. The Ivey PMI measures the month to month variation in economic activity as indicated by a panel of purchasing managers from across Canada.The gauge of employment fell to an adjusted 51.6 from 54.7 in August, while the prices index was at 58.2, its lowest level since March, down from 63.4.The unadjusted PMI rose to 54.5 from 50.3. Reporting by Fergal Smith

Canada's Ivey PMI shows activity expanding in September

Oct 4 (Reuters) - Chicago Federal Reserve Bank President Austan Goolsbee on Friday called the latest job market report "superb" and said more such reports would boost his confidence the U.S. economy is at full employment, with low inflation.Still, Goolsbee told Bloomberg TV, the job market by a broad set of measures is cooling and there are even some signs that inflation could undershoot the Fed's target. The Fed's policy rate is way above what most policymakers see as the eventual "settling point" for the Fed's policy rate and needs to come down a lot over next 12-18 months, Goolsbee said.Reporting by Ann Saphir

Fed's Goolsbee says jobs report 'superb,' still sees rate cuts ahead

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