U.S. nonfarm payrolls surge in August; unemployment rate holds at 4.1% — SkimNews
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- U.S. nonfarm payrolls surged by 162,000 jobs in August, well above the 56,000 economists polled by Reuters had forecast; July's figure was upwardly revised to a gain of 21,000 from a previously reported drop of 23,000.
- The unemployment rate held steady at 4.1%, and the Labor Department's Bureau of Labor Statistics framed the data as keeping a Fed interest rate hike on the table for this month's meeting.
- Fed Governor Christopher Waller said Thursday he was inclined to argue in favour of keeping rates steady at the upcoming meeting if incoming data confirmed inflation pressures were cooling.
- Financial markets priced a roughly 52% chance of a rate hike at the Fed's September 15-16 meeting, down from 63.2% on Wednesday, according to CME's FedWatch tool.
- Concerns about inflation and a lack of forward guidance from the Fed helped boost U.S. Treasury yields, driving the 30-year fixed mortgage rate to a one-year high of 6.71%, per Freddie Mac data released Thursday.
- Labour market momentum had decelerated after surging in the spring, with the source attributing the earlier slowdown partly to the oil price shock and supply chain strains from the U.S.-led war with Iran.
Why it matters: The 162,000 print — nearly triple the 56,000 consensus — gives the Fed cover to hike if inflation re-accelerates, with markets now split roughly 52-48 on a September move after Waller's push for patience. Bond markets are already repricing: the 30-year fixed mortgage hit a 6.71% one-year high on Thursday, so any further hawkishness from the Fed lands directly on housing affordability for prospective buyers.
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