The U.S. Department of Labor announced on Friday (2nd) that non-farm payrolls added 315,000 jobs in August, slightly higher than market expectations of 300,000, but far below the revised previous value of 526,000, and last month’s wage gains also increased slightly The decline, combined with the unemployment rate at 3.7% in August, above consensus expectations of 3.5% and up from 3.5% in July, still remains relatively strong for the overall job market and is unlikely to stop the Fed from continuing Accelerate the determination to tighten monetary policy.
August nonfarm payrolls report:
- Non-agricultural employment reported 315,000, expected 300,000, the previous value was revised down from 528,000 to 526,000
- Unemployment rate at 3.7%, expected 3.5%, previous value of 3.5%
- Average weekly hours worked 34.5 hours, expected 34.6 hours, previous value 34.6 hours
- The average hourly wage growth rate was reported at 5.2%, expected 5.3%, the previous value of 5.2%
- The monthly growth rate of average hourly wages was reported at 0.3%, expected 0.4%, and the previous value was 0.5%
- The labor force participation rate was reported at 62.4%, expected 62.2%, and the previous value was 62.1%
Nonfarm payrolls have increased by 5.8 million over the past 12 months, and the labor market continues to recover from the pandemic. The total number of non-farm payrolls is still 240,000 higher than the level before the outbreak of the epidemic in Europe and the United States in February 2020. This means that although the number of non-farm payrolls fell significantly in August, the overall labor market is still relatively strong.
Specifically, professional and business services continued to lead non-farm payroll growth, with 68,000 new jobs in August and 1.1 million in the past 12 months, followed by healthcare with 48,000 new jobs , the retail trade industry added 44,000 jobs.
It is worth noting that the labor market in the leisure and hospitality industry has cooled significantly, with 31,000 new jobs in this field in August, far below the 60,000 in July. Employment in the leisure and hospitality industry is still 1.2 million less than before the outbreak in February 2020.
Combined with the recently released ADP report, known as the “small non-farm farmer”, the US job market may have cooled. Data showed that the US ADP employment increased by 132,000 in August, far below the expected 300,000 and July’s 270,000.
On the whole, however, the labor market remains tight, and Powell’s hawkish attitude at the annual meeting of global central banks indicated that the Fed will continue to tighten policy to stabilize prices even if the number of new jobs falls sharply and the U.S. economy will slow further.
Expert opinion
Dennis DeBusschere, founder of research firm 22V Research, said today’s non-farm payrolls report was positive for risk assets on the day, as it reduced the likelihood of a sharp Fed rate hike. Still, labor demand appears to be strong for the Fed, making it unlikely that financial conditions will ease significantly, stressing that the reported numbers remain fairly strong.
With slightly higher-than-expected payrolls, higher unemployment and slightly weaker average hourly earnings, the initial market reaction confirmed sentiment was too pessimistic ahead of the report, according to John Kolovos, a strategist at Macro Risk Advisors. Kolovos estimatesS&P 500 IndexA rebound to 4,055 is possible after that, and 4,220 is still possible.
Market Reaction
At the time of writing, according to data from the CME Group FedWatch Tool, the probability of the Fed raising interest rates by 2 yards (50 basis points) in September was 42%, and the probability of raising interest rates by 3 yards (75 basis points) was 58%.
In the stock market,Dow Jones Industrial AverageIt rose more than 350 points or 1.11% to 32,006.91 points temporarily;Nasdaq Composite IndexUp more than 100 points or 1.13%, to temporarily report 11,917.72 points;S&P 500 Indexrose 1.2% to temporarily report 4,014.55 points;Philadelphia SemiconductorThe index rose 1.73% to temporarily close at 2,671.26 points.
U.S. 10-year Treasury yieldfell to 3.239%,US dollar indexfell to 109.045,goldPrices rose nearly 1 percent to trade at $1,726.20 an ounce.