Heading into the long Labor Day weekend, investors were dealt a curious report from the Bureau of Labor. The headline gain of 173,000 new jobs was most certainly below par. The estimate from Bloomberg before the release called for a gain of 217,000 jobs.
However, a net two month revision of 44,000 to prior data appears to be a healthy offset and one that in part dragged the headline unemployment rate down to 5.1% and to its lowest since April 2008. The latest August reading failed to prove that job growth was slowing down on a sustainable basis.
Manufacturing jobs saw a net loss of 17,000, somewhat consistent with the direction of the latest ISM survey, but still inconsistent with overall growth in the goods sector. Likewise, while the pace of both retail and business hiring was lower than usual, it was robust within education and leisure sectors. And government hiring at the state and local level provided a significant yet atypical boost of 31,000 jobs to the headline reading.
Overall, slightly weaker, yet not so much that the FOMC can justifiably balk from lifting rates when it meets later in September. Stock futures remained significantly lower over ongoing global equity problems while bond prices pared gains on the dip in the rate of unemployment.
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