Some analysts continue to expect the Fed to raise rates this month, including economist Jan Hatzius at Goldman Sachs who said the August job gains are “just enough” to be convincing.
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A broader gauge of unemployment, which includes part-time workers who would prefer full-time work as well as those who have given up their job hunts in the past year, remained at 9.7 percent. Analysts had expected payrolls to rise by 180,000. The payrolls rise reinforces views the economy has regained speed after nearly stalling in the first half of the year.
Fed funds futures on Friday suggested traders saw a 24-percent probability of a Fed rate hike later this month, roughly unchanged from Thursday’s probability, according to CME Group’s FedWatch program.
Rate hike probabilities for September and December had risen after last Friday’s remarks by Fed chairwoman Janet Yellen that the case for raising rates had strengthened in recent months.
The Fed hiked rates in December for the first time in almost a decade and has signaled since March that two rate increases could be in order this year.
Even though substantial labor market slack has been reduced, millions of Americans remain unemployed, a source of frustration that could weigh on the minds of some voters in the November presidential election.
Several Fed officials have made hawkish comments about a rate hike in recent weeks, leaving investors unable to rule out the possibility of an increase at the central bank’s next meeting, scheduled for September 20-21. “Since the 15th of the month falls after the survey period, increases in bi-monthly pay are less likely to have been captured, skewing the result lower”, said Michelle Girard, chief US economist at RBS in Stamford, Connecticut. August figures are often revised higher in subsequent months.
Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with population growth. Low response rates in a popular vacation month and difficulty adjusting for seasonal effects at the start of the school year could be to blame.
“Overall, it still looks like the job market is doing well”, said Michael Feroli, chief USA economist at JPMorgan Securities LLC in NY, who projected a 150,000 gain in payrolls.
The timing of the next rate hike could also be determined by wage growth.
For the week the SP 500 rose 0.5 per cent to mark its first positive week in three, while the FTSEurofirst 300 posted its second straight week of gains and its biggest since mid-July, at 1.9 per cent.
Americans worked fewer hours last month, with the average workweek dipping 0.1 hour to 34.3 hours.
The moderation in gains, which reflects a calendar quirk, pulled down the year-on-year gain to 2.4 percent from an upwardly revised 2.7 percent in July, which was the largest rise in seven years. “We believe there is an 80 percent probability of at least one rate hike this year”.
For the year-to-date, Ohio’s economy has added 78,800 jobs, and the state’s 12-month employment growth rate, 1.5 percent, is moving closer to the national average, 1.5 percent. This news story is related to Print/147540-Slower-US-payrolls-growth-dims-Sept-Fed-rate-hike-prospects/ – breaking news, latest news, pakistan ne.
Still, not all recent data on the economy have been positive: The manufacturing sector in particular showed signs of struggle last month.
Temporary-help jobs, a harbinger of future hiring, fell 3,100.
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“The data-dependent Fed will most likely see the payroll numbers as taking pressure off any immediate need to hike interest rates, significantly reducing the scope for further policy action in September”.
