Total non-farm payroll employment increased by 151,000 in August, the U.S. Bureau of Labor Statistics reported Friday.
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LONDON – The dollar fell and stocks rose after US jobs growth was weaker than expected in August, slashing prospects of a rate hike by the US Federal Reserve this month.
Finally, Friday’s job report will be closely watched by the Federal Reserve as “firm” hiring data along with a “steady” unemployment rate bolsters the case for the central bank to hike its benchmark interest rate.
Lacker expressed his views after Fridays jobs report, which some have called disappointing.
The odds of a rate hike in September stood at a measly 12 per cent, according to CME Group’s FedWatch tool.
“It’s not all around strong enough to assure a September interest rate hike”.
Goldman Sachs Chief Economist Jan Hatzius said in a note that while the August employment report featured some soft elements, it still would be “just enough” to induce the Fed to move later this month.
The Fed lifted its benchmark overnight interest rate at the end of past year for the first time in almost a decade, but has held it steady since amid concerns over persistently low inflation.
CURRENCIES: The dollar strengthened to 103.47 yen from 103.26 yen in late trading Thursday.
The dollar weakened on the back of the news, sending sterling as high as 1.33 against the United States dollar.
The overall August job gain was far below July’s 275,000, which was the most in eight months, and June’s increase of 271,000.
The US economy has been expanding steadily since the end of the last recession in 2009. They added a modest 151,000 jobs, about half the blockbuster gains of the two previous months. “This should put to rest the conversation on September”, said Tom Porcelli, chief U.S. economist at RBC Capital Markets in NY.
JPMorgan – December should still mark the timing of the next Fed rate hike, and the chance for a September rise is about 20 percent. Hourly wages also barely increased. The average workweek ticked down to 34.3 hours from 34.4. The proportion of Americans who are either working or looking for work has been flat for about two years near a 40-year low.
The unemployment rate and labor force participation rate held steady at 4.9% and 62.8%, respectively. “Wage growth will have rebounded, and we expect payrolls to be rising more quickly too”, he said. Dow e-minis were up 48 points, or 0.26 percent, with 29,723 contracts changing hands.
Still, not all recent data on the economy have been positive: The manufacturing sector in particular showed signs of struggle last month. The best estimate then is that full-time employment, which is unaffected by involuntary part-time and dual-job holders, is essentially unchanged in August.
Back in July, employers added 255,000 jobs which marked a decrease from the 292,000 jobs created in June.
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Hiring expanded in retail – particularly driven by increases in building material stores – while department store payrolls continued to decline.
