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Posted September 1, 2023 at 11:00 am
The August jobs report released by the Bureau of Labor Statistics on Friday indicated a mixed picture for the U.S. labor market, as job creation exceeded expectations, but simultaneously, the unemployment rate inched upward and wage growth moderated more than expected.
August’s non-farm payroll growth came in at 187,000, a robust increase from the downwardly revised July figure of 157,000, and surpassing the projected figure of 170,000. While employment creation among American companies is tracking slightly below the six-month average, it remains stronger than what was initially forecasted.
The total non farm payroll employment figures for June were adjusted downward by 80,000, shifting from a previously reported increase of 185,000 to 105,000. Likewise, the July figures saw a revision, decreasing by 30,000, from 187,000 to 157,000.
The unemployment rate saw an uptick, rising from 3.5% to 3.8%, contrary to expectations of 3.5%. The number of unemployed persons rose by 514,000 to 6.4 million.
The increase in unemployment, coupled with the reduction in job openings to 8.8 million, marks a general rebalancing trend between demand and supply in the labor market.
Wage dynamics are starting to mirror the broader cooling of the U.S. labor market. Average hourly earnings grew by 4.3% year-on-year, falling short of the anticipated 4.4%. On a monthly basis, the rate of increase slowed to 0.2%, a notable deceleration compared to July’s 0.4% and the expected 0.3%.
These figures may further solidify market beliefs that the Federal Reserve will maintain interest rates at their current levels in September.
The U.S. dollar index, as tracked by the Invesco DB USD Index Bullish Fund ETF fell 0.3% minutes after the release.
The rate-sensitive two-year Treasury yields fell over 7 basis points to 4.79%, at the lowest in more than two weeks.
Traders further adjusted September’s rate predictions, assigning a mere 7% chance to a rate hike, down from 12% a day earlier.
U.S. equity futures rose ahead of the opening bells in New York. The SPDR S&P 500 ETF Trust is up 0.7% in premarket trading.
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Originally Posted September 1, 2023 – August Job Creation Tops Forecasts, But Unemployment Ticks Higher, Wage Growth Slows
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