- Prior was -23K (revised to +21K)
- Two-month net revision +55K
- June was +57K
- Unemployment rate 4.1% vs 4.1% expected
- Prior unemployment rate 4.1%
- Unrounded unemployment 4.1413% vs 4.0900% prior
- Participation rate 61.6% vs 61.4% prior
- U6 underemployment rate 7.7% vs 7.9% prior
- Average hourly earnings +0.3% m/m vs +0.3% expected
- Average hourly earnings +3.1% y/y vs +3.0% expected
- Average weekly hours 34.4 vs 34.3 expected
- Change in private payrolls +127K vs +45K expected
- Prior private payrolls +30K (revised to +71K)
- Change in manufacturing payrolls +16K vs +5K expected
- Government payrolls +35K vs -53K prior
Ahead of the report, fed funds futures were pricing in a 50% chance of a September rate hike and 32 bps of hikes this year. USD/JPy was trading at 156.13 and S&P 500 futures were up 2 points.
This is a great report and there is a big US dollar bid in the aftermath. The jump in participation is a nice reversal from the recent trend and it’s what kept the unemployment rate at 4.1% rather than lower.
EUR/USD is quickly down to 1.1591 from 1.1623 but the clearest signal is in fixed income where US 2-year yields are up 7 bps to 4.40% in a sign the market thinks this in inflationary.
In terms of sectors, education jobs are tricky at this time of year and we got a +34K, which offsets a -58K reading in July. Leisure and hospitality rose 62K, overwhelmingly led by food services/drinking places. Healthcare and social assistance was also +28.4K in a notable change.
In terms of the AI boom, there was a nice pop in construction up 22K and the flipside of that was on the IT side with computing infrastructure/data processing -7.7K, publishing -6.7K, broadcasting/content -5.0K and telecom -2.1K.
I’d characterize the 162K as less impressive than the headline: roughly 34K came from education, particularly a reversal in local-government schools, and another 59K came from restaurants/bars. Those two areas alone account for about 93K of the 162K.
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