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.
Stocks and bonds unsettled by August data The analysis in this article is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice.
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About the Author
Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.