The August Employment Situation Report featured a softening in nonfarm payrolls after accounting for revisions, a jump in the unemployment rate to 3.8%, and a moderation in average hourly earnings growth.
Altogether the key takeaway from the report is that it was a Goldilocks report as it pertains to the market’s thinking that the Fed won’t be raising rates again.
The 2-yr note yield, which is most sensitive to changes in the fed funds rates, slipped to 4.78% immediately after the report, but sits at 4.81% now. The 10-yr note yield is up one basis point to 4.10% after dropping to 4.05% after the data.
Nonfarm payrolls rose by 187,000 in August (consensus 175,000) following a revised 157,000 increase in July (from 187,000).
Nonfarm private payrolls grew by 179,000 in August (consensus 172,000) from a revised 155,000 in July (from 172,000).
The unemployment rate jumped to 3.8% in August (consensus 3.6%) from 3.5% in July.
Average hourly earnings rose by 0.2% in August (consensus 0.3%) following a 0.4% increase in July. The average workweek rose to 34.4 hours in August (consensus 34.3) from 34.3 in July.