The job market was stronger than expected in September, but that could mean bad news for commercial real estate pros hoping that interest rates drop quickly.

The U.S. added 254,000 nonfarm payroll jobs in September, and unemployment decreased by 0.1% from August, per the latest jobs report from the Bureau of Labor Statistics. But that could spell discontent for CRE if the strong employment data takes away incentives for another interest rate cut.

The leisure and hospitality, healthcare, and social assistance and government sectors — all sectors that occupy office buildings — saw the most job growth during the quarter, CNBC reported. But manufacturing and warehouse industries saw jobs shrink amid a sluggish year for industrial leasing.

The odds of a 50-basis-point rate cut coming in November dropped following the jobs report release, according to Seeking Alpha.

Traders had wagered a 32.1% chance of a half-point rate cut prior to Friday’s jobs data, but that fell to just 5.5% after the BLS published its employment report, data from CME FedWatch showed.

That prediction lines up with Federal Reserve Chair Jerome Powell’s statements this week that predicted the next rate cuts would be in 25-bps increments, The New York Times reported. The Fed historically has cut rates in quarter-percentage-point increments.

September’s 50 bps cut, the first since the pandemic began, slashed the central bank's benchmark interest rate to between 4.75% and 5%. Many CRE professionals had expected the cut to be just 25 bps, triggering jubilation and a fresh wave of optimism from industry players.

Hopes for another 50 bps cut could be put on ice following the jobs report.

“The monster upside surprise suggests that the labor market may actually be a picture of strength, not weakness, and it completely dismisses the idea that the Fed could even contemplate another 50bps cut in November,” Seema Shah, chief global strategist at Principal Asset Management, told CNBC.