Upside Surprise on NFP

The US Bureau of Labour Statistics non-farm payrolls report came in hotter than expected for August amidst a mixed inflationary environment. The payrolls report showed an increase of 187,000 new jobs, higher than the 170,000 expected.

The spotlight fell on the Unemployment Rate, which rose 0.3% to 3.8% for August as the number of unemployed persons increased by 514,000 to 6.4 million. The unemployment rate showed little change from a year ago when the unemployment rate was at 3.7%. The lower unemployment rate might be good news for the US Fed, which could see an interest rate pause in September.

As measured by Average Hourly Earnings, annual wage inflation was lower at 4.3% from the 4.4% expected. US Index Futures got a bid in the market after the NFP announcement as short-term bond yields took a tumble as the US Dollar lost some steam.

Piece written by Barry Dumas, Head of Client Education

Sources: Bloomberg, U.S. Bureau of Labor Statistics

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