Quick Brief – US jobs bounce back less than expected, dollar slips
US economy adds 142k jobs in August versus forecast of 160k
But unemployment rate dips as wage growth accelerates
Nonfarm payrolls bounced back in August, rising by 142k, while the unemployment rate fell slightly to 4.2% as expected. However, the payrolls figure is below the consensus forecast of 160k jobs and the prior month’s reading of 114k was revised down to 89k, feeding doubts about the health of the US economy.
Nevertheless, the pickup in jobs growth should come as some relief for Fed policymakers who are nervous about the risk of a sharp cooldown in the US labour market. Even if enough members of the FOMC are not impressed by today’s NFP report and would be willing to vote for a 50-basis-point rate cut at the September 17-18 meeting instead of 25 bps, the upside surprise in wage growth will likely deter them.
Average hourly earnings growth quickened to 0.4% on a monthly basis and to 3.8% on an annual basis from 3.6% in July.
This probably explains why the US dollar’s initial spike lower was pared back and the euro’s attempt to climb above $1.1150 was short lived.
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