#10月非农数据聚焦 #Gate股票畅聊季 Whether Rates Rise in December Depends on Oil Prices, Not Nonfarm Payrolls

This Friday night brought another textbook case of the market’s many faces.
The U.S. Bureau of Labor Statistics’ numbers landed: 165k jobs were added in October, more than double the market’s forecast of 65k, while the unemployment rate fell from 4.2% to 4.1%.
Traders’ muscle memory was faster than their brains — the dollar index shot up by more than ten points in an instant, the 10-year Treasury yield surged 6.3 basis points to 4.898%, and spot gold plunged more than $30 in three minutes, falling as much as 1.15% intraday to $4,041.89.
How many people in front of their screens were already typing headlines like “Strong jobs, rate hikes, commodities crash”?
But by the second half of the night, the picture had completely changed. The 10-year Treasury yield retreated from around 4.9%, closing up only about 4 basis points at 4.87%; gold clawed back from its deep drop, narrowing its loss to 0.44% at the close, at $4,070.75, with a long lower wick on the candlestick. The real casualties were industrial metals and energy and chemical commodities, which are most sensitive to interest rates and stayed under real pressure all night.
Wall Street traders dug a hole for gold in three seconds, then filled it back in over three hours — muscle memory drove the open, while a gap in understanding drove the close.

Smart money saw the cracks beneath the report’s glossy surface.
First, look at what kinds of jobs made up those 165k new positions. Professional and business services added 70k in a month, which sounds impressive, but the industry averaged only 15k new jobs per month over the past twelve months. Of this month’s surge, actual professional and technical services accounted for just 33k; most of the rest were outsourced jobs such as administrative support and temporary staffing. Health care added 42k, and transportation and warehousing 25k — all in-person work that requires people to show up and work hands-on, face-to-face.
Meanwhile, jobs are still shrinking in information and finance, two of the most glamorous white-collar industries of the past decade.
The more glaring figures are buried in the statistical footnotes: the number of people who couldn’t find full-time work and were forced to take part-time jobs surged by 339k in a single month, reaching 4.84 million; the U-6 unemployment rate, which measures the true extent of labor underutilization, climbed to 7.9%. Average weekly hours in the private sector remained stuck at 34.4, unchanged — employers would rather hire another person than give existing workers one more hour on the job.
As jobs shift toward lower-paid work, wages naturally struggle to rise. Average hourly earnings rose 0.4% month over month in October, which looks decent, but were up only 3.1% year over year. U.S. CPI was up 3.7% year over year in September — wages aren’t keeping up with prices. It’s simple arithmetic: ordinary Americans’ purchasing power is being eaten away by inflation.
Chief economists at top Wall Street investment banks put it bluntly after the data: wage growth just above 3%, minus productivity gains of around 2%, implies inflation right around the 2% target. There’s simply no kindling for a wage-price spiral.
Think about it: for a spiral to take hold, workers need to have the leverage to demand successive rounds of raises, and companies need to feel confident enough to pass on their costs to consumers, again and again.
But right now? White-collar workers fear being replaced by AI, blue-collar workers are glad to have a job, and part-timers are still lining up for full-time work. Who has any bargaining power?
So the real meaning of this jobs report isn’t “the economy is overheating and needs rate hikes,” but “the economy is holding up, so rates can stay higher for a while longer.”
The truth about U.S. employment this cycle is that jobs AI can’t replace are hiring without offering meaningful wage growth, while jobs AI can replace are disappearing quietly.

So will rates rise in December?
Let’s start with the facts, not wishful thinking.
After the data came out, interest rate futures priced in an 80% probability of a 25-basis-point rate hike in December, up from 67%; the president of the San Francisco Fed said the Fed would “have to tighten further,” while the head of the New York Fed reiterated that “inflation is still too high.”
One top investment bank has even added two rate hikes this year to its baseline forecast.

My view: this jobs report alone cannot determine December’s outcome.
It gives the hawks at the Fed confidence, but it doesn’t provide conclusive evidence for a rate hike. The real deciding factors are the upcoming October CPI and PCE reports — and behind both is a variable no one can control: oil prices.
The U.S. government’s official energy figures put it this way: every sustained 10% rise in crude oil prices adds about 0.4 percentage points to headline CPI over the following few quarters, then passes through 0.15 percentage points to core inflation. Energy was the biggest driver of September’s 0.6% month-over-month CPI increase.

There are really only three possible paths from here.
If oil holds near its current highs of almost $100, and core CPI and PCE come in hotter than expected, those 25 basis points in December will most likely be delivered;
if inflation data are moderate and employment remains strong, the Fed will be happy to stand pat, opting for “higher rates for longer” instead of “adding another spark”;
there’s also another possibility — if Brent really does fall steadily from $98 now to $80, as optimists hope, while the Middle East meaningfully cools down and the risk of disruption to traffic through the Strait of Hormuz recedes, the case for a rate hike could evaporate overnight.
What’s interesting is that the market is already betting on that third scenario: Brent crude plunged 13.32% this week, its biggest weekly drop since 2020. Just one week ago, it was still above $113. On the other hand, the Wall Street investment bank whose commodity research commands the market has just raised its fourth-quarter Brent forecast to $105.
Bulls and bears are both betting on the same thing: the fighting in the Middle East. But whichever path unfolds, don’t expect rate cuts anytime soon. Until inflation returns to 2%, the Fed has no reason to relent, and this economic machine is proving more resilient than anyone expected.

Strong jobs, a hot economy, rising rate-hike expectations, and a broad commodity sell-off — this linear way of thinking no longer works in an era when AI is reshaping employment and supply is driving markets.
Look at the commodity rally over the past two years: when was it driven by a broad-based surge in demand? Oil has been driven by geopolitical choke points, copper by rigid supply after years of underinvestment in mines, and gold by central banks hoarding the metal and de-dollarization.
Wall Street’s commodity teams know this well: supply is lighting the fire in this rally, while the rate-cutting cycle is what will make it spread. Only when the Fed truly pivots and the dollar’s liquidity reaches an inflection point will precious and industrial metals get a double boost from valuations and fundamentals. Every period of consolidation in gold right now is a wait for the starting gun — that investment bank cut its year-end gold price target from $4,650 to $4,150, lowering its timing expectations, not its conviction.

AI is rewriting two things at once: it’s replacing white-collar jobs, quietly removing the fuse for wage inflation; and it’s driving demand for copper and electricity, redrawing the demand curve for industrial metals.
From now on, Fed policy is no longer as simple as “hike when it’s hot, cut when it’s cold.” And at the end of every painstaking forecast stands an unruly variable.
Oil prices are the dice God throws at the macroeconomic world — except the Strait of Hormuz is written on them. Until the dice land, all we can do is buckle up and keep our eyes on them.#WCTCS9 $XTIUSD