US jobs report whiffs, Aussie dollar lifts again

The US economy added 151,000 jobs in August, fewer than forecast, while the unemployment rate was unchanged at 4.9%.

Wage growth was weaker than expected.

Economists had forecast that nonfarm payrolls grew by 180,000 and that the unemployment rate fell slightly to 4.8%, according to Bloomberg.

Some service-providing industries like restaurants and social assistance, which account for most job creation and economic growth, saw gains that were in line with those of previously strong months.

The Australian dollar has risen slightly on the news, and a short time ago was trading at just over US76c, having sat at 0.7550 just before the release.

The focus was on whether the Federal Reserve would consider the data strong enough to raise interest rates soon, which it can do as early as its September meeting.

In a note sent out late on Thursday, Dave Lutz, the head of exchange-traded funds at JonesTrading, said he’d heard from most people that a jobs reading above 225,000 should tilt Fed futures — traders’ bets on future rates — toward a hike in September. After the jobs report, the probabilities of rate hikes in both September and December fell.

Fed Chair Janet Yellen last week noted the “continued solid performance of the labour market” as part of the strengthening case for higher interest rates, following two strong months for job creation. July payrolls were revised higher by 25,000 to 275,000 in Friday’s report.

Since 2010, the August jobs report has undershot expectations by the most of any month on average because of seasonal-adjustment issues. The Bureau of Labour Statistics also struggles with getting private companies to respond to the establishment survey for the report, perhaps because of the timing of summer vacations.

Average hourly earnings rose 0.1% month-on-month, less than the 0.2% forecast, and increased by 2.4% year-on-year (versus 2.5% expected). Pantheon Macroeconomics’ Ian Shepherdson noted in a preview that when the survey week precedes the 15th of the month — payday for many people — some employers fail to report earnings.

Following the report, stock futures jumped and precious metals rallied.

Here’s what Wall Street was expecting, via Bloomberg:

  • Nonfarm payrolls: +180,000
  • Unemployment rate: 4.8%
  • Average hourly earnings month-on-month: +0.2%
  • Average hourly earnings year-on-year: +2.4%
  • Average weekly hours worked: 34.5
  • Change in manufacturing payrolls: -4,000

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