Live Updates: The US economy added a whopping 254,000 jobs last month

Federal Reserve Chair Jerome Powell holds a press conference in Washington, DC on September 18

Friday's shockingly robust September jobs report shows the Federal Reserve may not need to make another outsized interest rate cut next month.

When the Fed cut interest rates by half a percentage point last month, central bank chief Jerome Powell said in a news conference that the decision was aimed at protecting the strength of the labor market as inflation appeared to have come under control.

Some economists thought this was a so-called “insurance cut.” In addition to stabilizing prices, Congress also tasked the Fed with promoting maximum employment, and with price pressures now largely contained, central bankers are more focused on the health of America's labor market.

With employers still hiring at a solid pace and unemployment not rising further after rising steadily over the past year, that means Fed officials won't need to take more aggressive action to prevent the labor market from deteriorating. That just doesn't seem to be happening at the moment, at least according to the government. A separate report released earlier this week showed job vacancies unexpectedly increased in August and remained above pre-pandemic levels.

“These results likely require a 50 basis point rate cut at the Fed’s next meeting in November unless next month’s jobs report is a disaster,” Bret Kenwell, U.S. investment analyst at eToro, wrote in a note Friday. “While a report doesn't necessarily give investors the all-clear, it is a big step in the right direction and the September jobs report was certainly a statement.”

Some Fed officials had already said they would prefer to cut interest rates more cautiously in the future, even before the release of September's impressive jobs report.

“After 50 basis points, we're still in a net stressed position, so I was comfortable with taking a bigger first step,” Minneapolis Fed President Neel Kashkari told CNBC last week. “As we move forward, I expect that broadly speaking, unless the data changes significantly, we will probably take smaller steps.”

According to the futures market, investors are largely betting that the Fed will cut interest rates by a quarter point at its next policy meeting on November 6th and 7th.