Rates Surge Following Hot September Jobs Report

By Michael J. Kramer of Mott Capital Management

Founder/CEO at Mott Capital Management, LLC • Oct 3, 2026 at 3:18 PM EDT • Updated Oct 3, 2026 at 3:29 PM EDT

September’s household survey reveals a resilient labor market, with the 10-year yield jumping 11 basis points as real yields climb.

Everyone is calling Friday’s jobs report weak because the establishment survey showed just 29,000 jobs. The household survey tells a very different story, with employment rising by 406,000 in September after roughly 600,000 in August, nearly a million people finding work in two months. The unemployment rate ticked up only because people came off the sidelines and rejoined the labor force.

The bond market seems to agree. After an initial drop, the 10-year reversed sharply and finished the week about 11 bp higher. That move isn’t about inflation fears. Real yields and the term premium are doing the work, and on several measures, there is still plenty of room for rates to climb.

Meanwhile, the dollar is quietly strengthening against nearly everything except the yen, and high-yield credit spreads are starting to widen.

In this week’s video, I walk through the household data, the charts on rates, the dollar and credit, and the levels I’m watching next.

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