Jobs report whiffs
Wage growth was weaker than expected.
Economists had forecast that the economy added 180,000 nonfarm payrolls, according to Bloomberg, while the unemployment rate fell one-tenth to 4.8%.
The focus was on whether the Federal Reserve would consider the data strong enough to raise interest rates again soon, as early as its September meeting.
Since 2010, the August jobs report has undershot expectations by the most in any month of the year on average, due to seasonal-adjustment issues. The BLS also struggles with getting private companies to respond to the establishment survey for the report, noted MUFG Securities' John Herrmann.
In a note late on Thursday, Dave Lutz, head of ETFs at JonesTrading, said he'd heard from most people that a jobs reading above 225,000 should tilt Fed futures - traders' bets on future rates - towards a hike in September.
Average hourly earnings rose 0.1% month-on-month, less than the 0.2% forecast, and increased by 2.4% year-on-year (2.5% expected).
That number would be closer to the previous jobs reports that were north of 250,000.
Following the report, stock futures jumped and precious metals rallied.
Here's what Wall Street is expecting, via Bloomberg:
- Nonfarm payrolls: +180,000
- Unemployment rate: 4.8%
- Average hourly earnings month-on-month: +0.2%
- Average hourly earnings year-on-year: +2.5%
- Average weekly hours worked: 34.5
- Change in manufacturing payrolls: -4,000