US non-farm payrolls rose by 96,000 in August, according to the latest data from the Bureau of Labour Statistics (BLS).

That versus the consensus estimate for a rise of 125,000.

Drop in unemployment not such good news



The unemployment rate, meantime, which is calculated from the so-called Household Survey data, has fallen to 8.1% from 8.3% in July. Economists had thought it would remain unchanged.

However, much of that decrease has to do with a 368,000 person decrease in the size of the civilian labour force. In fact, employment dropped by 119,000.

Non-farm payrolls clearly lower than expected ...



Non-farm payrolls in the private sector increased by 103,000 (Goods: -16,000, Services: 119.000) during the month of August. Manufacturing saw a loss of 15,000 jobs, alongside another -2,000 construction jobs.

The change in total nonfarm payroll employment for June has been revised from 64,000 to 45,000, and the change for July from 163,000 to 141,000.

Critically, average hourly earnings remained flat versus last month (1.7% year-on-year), instead of the 0.2% (1.8% year-on-year) rise envisaged by markets.

"The above data is quite charged politically, coming as it does right before the next presidential elections. Interestingly, it may dismay those who had been expecting a seasonal pick-up in employment. As well, it will probably be seen as moderately increasing the odds for a further round of quantitative easing," comment analysts at Digital Look.

AB

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