The unemployment rate ticked down to 4.2%, as expected, from 4.3% in July.
Nonfarm payrolls rose by 142K in August, accelerating from the 89K added in July (which was revised down from +114K), but still lagging the +160K consensus,
“August #jobsreport is a touch better than July but not by much: the job market is clearly cooling,” said Daniel Zhao lead economist at jobs site Glassdoor in a post on X.
Wages gained more ground than expected in the month, with average hourly earnings climbing 0.4% vs. 0.3% consensus and 0.2% prior On a Y/Y basis, average hourly earnings rose 3.8% vs. 3.7% consensus and 3.6% prior.
“Wage growth moved up a bit to 3.8% from 3.6%, but not enough to get in the way of the Fed’s pre-announced rate cut later this month,” said Brian Coulton, Fitch Rating’s chief economist,
The labor force participation rate was unchanged at 62.7%, matching consensus.
There was a combined 86K downward revision for June and July.
With the weaker-than-expected jobs growth, traders have increased expectations for a 50 basis-point Fed rate cut on Sept. 18, bringing the probability to 47.0% from 40.0% on Thursday. The 25-bp cut probability dipped to 53.0% from 60.0% a day earlier, according to the CME FedWatch tool.
Broader markets are drifting, there’s really nothing in this payroll report that suggests the September swoon is over, I would stay on the sidelines and let the markets correct a little more.
