Nevertheless, markets came to the conclusion that the NFP data wasn't all that bad after looking into it more closely. Rather, it demonstrates that Hurricane Beryl, which caused numerous firms to close during that month, was the reason behind July's low number.
In addition, the unemployment rate decreased following a run of rising months, which is also encouraging. The US Dollar therefore closed the day higher, which could signal the beginning of a bullish trend.
US August Non-Farm Payrolls (NFP) Report
- Non-farm payrolls: +142K vs +160K expected (previous was +114K)
- Two-month net revision: -86K vs -29K prior
- Unemployment rate: 4.2% (expected 4.2%, prior 4.3%)
- Unrounded unemployment rate: 4.220% vs 4.252% prior
- Participation rate: 62.7% (same as prior)
- Private payrolls: +118K vs +139K expected (prior revised down from 97K to 74K)
- U6 underemployment rate: 7.9% vs 7.8% prior
- Average hourly earnings (m/m): +0.4% vs +0.3% expected (prior revised from +0.2% to -0.1%)
- Average hourly earnings (y/y): +3.8% vs +3.7% expected
- Average weekly hours: 34.3 vs 34.2 prior
- Manufacturing payrolls: -24K vs +1K prior
- Household survey: +168K vs +67K prior
- Government jobs: +24K vs +17K prior
- Full-time jobs: -438K vs +448K prior
- Part-time jobs: +527K vs -325K prior
However, given July's negative revisions, the headline job statistics and the minor decline in the unemployment rate were insufficient to completely rule out the possibility. Still, they weren't strong enough to make a 50 basis point cut the baseline. In agreement, former Boston Fed President Eric Rosengren said that a 25 basis point reduction is more likely when payrolls increase by over 140,000 and the unemployment rate falls by 0.1% to 4.2%. Construction (+24k) and leisure and hospitality (+46k) saw gains, indicating no immediate risk of a recession and that real GDP growth is 2%. A 25 basis point decrease is more feasible, making a 50 basis point drop look improbable.
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