First Friday: Trouble in the Bond Market

Paula Pant (0:00)

We're going to start today with some very good news. And actually, we have great news on multiple fronts. We've got great news about the job market, great news year to date around the stock market, around the commodities market. We have volatile news around the bond market. We'll talk about that too. But I'm going to lead with some very, very good news that came out of Nepal this morning. Because nine days after the floods, two people have been found alive, two people have been rescued, which is nothing short of a miracle. And it is so uplifting after a tough nine days to have such good news. So we're going to cover all of that and more in this first Friday episode of the Afford Anything podcast. Welcome to the Afford Anything podcast, the show that knows you can afford anything, not everything. On Tuesdays, we typically answer questions that come from you, and on Fridays, we typically interview guests. But there's one exception, and that is the first Friday of every month, when we do a macroeconomic look at the economy, the markets, the world around us. So welcome to the September, 2026, first Friday, Afford Anything episode. I'm your host, Paula Pant. If you didn't catch my remarks on last Tuesday's episode, I am Nepali. I am from Nepal. I was born there, which is why even though we normally just talk about the US economy on these episodes, I would like to kick off by sharing some really uplifting news.

Sanjay Shah, age 30, is a mechanical foreman who is trapped in a hydropower tunnel in Nepal. And when the flood started, he ran to warn his coworkers to get to safety, and he got trapped. He has been 557 feet underground for the last nine days, trapped in a tunnel in complete darkness. He was rescued this morning. And medical assessments have confirmed that his vital signs are normal, and he is in stable condition. Kabir Maharajan, age 45, was a mechanical supervisor. He was also trapped 557 feet underground. And he was also rescued this morning. This is such incredibly uplifting news. At a time when many people had given up hope, it is such a testament to the persistence of the rescuers, the rescue operations. I posted a video on Twitter. The video came from the Nepali Army.

One of the rescuers is not wearing shoes. Let me just repeat that. One of the rescuers is not wearing shoes. Now, I don't know why that is. I don't know if he showed up to the site with shoes and somehow lost them off his feet mid operation. I don't know. Certainly, the mud can be very thick. I can imagine how it would pull a shoe off or both shoes off.

But you think about what it took for a team of rescuers, at least one of whom is barefoot, to descend 557 feet underground after nine days when you are tempted to give up hope. But they remained hopeful and they kept searching and they persisted. And today, they saved two lives. You know how the rescuers found them? So the both men over these nine days, the way that they maintained their strength was by praying. And that was how the rescuers found them. They were praying out loud and the rescuers heard their voices. Right now, in one of Nepal's big newspapers, there are photos of the father of one of the rescued men arriving at the airport in Kathmandu in order to reunite with his son.

What an incredible, inspirational story. And I also want to take a moment to give such sincere appreciation to people everywhere who are rescuers, who are first responders. So to people all over the world who are firefighters, paramedics, police officers, search and rescue teams, emergency workers, ordinary people, who show up in the aftermath of a disaster, and it's hard, and it's physically and mentally and emotionally grueling. I want to take this moment to appreciate people all over the world who are first responders, who are search and rescue. You're doing God's work. Thank you.

How do we transition from that to the jobs report? I guess we just do it, right? Well, so the jobs report came out.

The US added 162,000 jobs in the month of August. This wildly exceeded expectations. It tripled expectations. So analysts, experts, investors were expecting 53,000 jobs. This is triple. What we actually got was triple that number. The bulk of those jobs were in the private sector, 127,000 private sector jobs, 35,000 government jobs. The unemployment rate held steady at 4.1 percent. Labor force participation ticked up by two-tenths of one percentage point. And the broadest measure of unemployment ticked down, decreased by two-tenths of one percentage point. So unemployment steady, labor force participation slightly up, unemployment in its broadest form. When I say its broadest form, there's a particular measure that tracks not just unemployment, but also underemployment. That's what I mean when I say its broadest form. So unemployment in its broadest form, including underemployment, decreased, which is good. So good news on both fronts. And jobs tripled our expectations. We also revised our previous numbers from July to show 21,000 more jobs. So July initially had shown a loss of 23,000 jobs. We actually created 21,000 more jobs than we had previously known about. So that loss is not as steep as we had initially thought. In other words, lots of good news from the labor market. June also has final revision. So the standard practice for the BLS is to do three revisions. You do a revision after one month. You do another revision after two months. And then you do a big annual revision. So what that means is that we're always going to have numbers, revision numbers, for the previous two months. So we know the revised numbers for July. They're better than we thought. We also now have revised numbers for June, two months out. It shows that June had a gain of 31,000 jobs. That means June was not quite as good as we had initially thought. June had originally been reported as 57,000 jobs. Still, the data overall is quite strong. Now, the best performing sectors from July to August are leisure and hospitality, which gained 62,000 jobs, and state and local government gained 40,000 jobs. The worst performing sectors, information IT, loss of 23,000 jobs, and financial activities, loss of 11,000 jobs. Zooming out and looking at the full year, tracing August 2025 through August 2026, over the span of the last 12 months, the best performing sectors were private education and health services, which gained a little over half a million jobs, and professional and business services, which gained about 150,000 jobs, 152,000 to be specific.