Analysts had expected payrolls to rise by 180,000. Most Asian markets were listless Friday as investors awaited key USA job data that could influence the Fed’s interest rate policy.
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Traders are pricing in a 30 percent chance the central bank will boost rates at its September meeting, down from 34 percent before the jobs data, though the probability earlier slipped as low as 20 percent. Fed Chair Janet Yellen said in a speech last month that “the case for an increase. has strengthened in recent months”. The pace of job growth and the stagnant unemployment rate were slightly more disappointing than analysts had anticipated, though they were not weak enough to indicate that the recovery has been derailed.
Employment’s a miss – there were only 151,000 jobs created versus expectations for a 175,000 addition.
One can argue about seasonality and how the United States non-farm payrolls report missed expectations over the past five “August-ses” and how the three-month average growth in employment remains a respectable 232,000 but the absent these excuses, August’s U.S. jobs report missed expectations. There are, however, risks that August payrolls will undershoot expectations, given what some economists believe are challenges adjusting the data for shifts in school calendars. Over the last several years, the government’s August payrolls estimates have been weak only to be subsequently revised higher Reuter said. The manufacturing sector shed 14,000 jobs. “With this report, the private sector has added 15.1 million jobs since February 2010, and we are in the middle of the longest streak of overall job growth on record”.
Average hourly earnings rose 0.1 per cent from a month earlier to $25.73, following a 0.3 per cent increase in the previous month.
“Given the August payroll report’s tendency to underwhelm, the size of the miss likely had many breathing a sigh of relief”, he said. (The data are not seasonally adjusted.) Those people were not in the labor force, but they wanted and were available for work and had looked for a job sometime during the prior 12 months. Despite some gains, the participation rate remains near multi-decade lows, in part reflecting demographic changes.
August’s jobs gains could still be ample to make the Fed hike interest rates in December, nonetheless.
August’s job gain was far below July’s 275,000, which was the most in eight months, and June’s 271,000.
The Atlanta Fed is forecasting gross domestic product rising at a 3.5 percent annual rate in the third quarter. Employment at construction companies fell for the fourth time in the last five months.
The Dow Jones industrial average was up more than 100 points in morning trading as the tempered job gains eased traders’ concerns that the Fed was poised to lift interest rates this month.
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The U.S. Labor Department’s monthly report released Friday had few clear signals about the economy’s pace, said Michael Hicks, director of Ball State’s Center for Business and Economic Research.
