Unemployment Rate Unexpectedly Tumbles As August Payrolls Come In Line

Amid a wide range of sellside estimates, and a whisper number that was either too high or too low depending on whom you asked, moments ago the BLS reported that in August, the number of payrolls was almost unexpectedly in line with consensus expectations: according to the August jobs report, some 1.371MM payrolls were created, essentially on top of the 1.35MM expected.

Likewise, the average hourly earnings also printed generally in line, rising by 4.7% in August, unchanged from the previous month, and above the 4.5% expected.

According to the BLS, average hourly earnings for all employees rose by 11 cents to $29.47. Average hourly earnings of private-sector production and nonsupervisory employees increased by 18 cents to $24.81, following a decrease of 10 cents in the prior month. As the BLS notes, the large employment fluctuations over the past several months–especially in industries with lower-paid workers–complicate the analysis of recent trends in average hourly earnings.

Also worth noting is that the average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.6 hours in August. In manufacturing, the workweek rose by 0.3 hour to 40.0 hours, and overtime increased by 0.1 hour to 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.0 hours.

The labor force participation rate rose modestly, from 61.4 to 61.7, as the Civilian Labor Force rose by 1 million to 160.8 million in August while the population rose by just 200K to 260.558MM.

Where there was a surprise was in the unemployment rate, which unexpectedly tumbled from 10.2% in July to 8.4%, smashing expectations of a 9.8% print. It looks like Trump wants to go into the November elections with a 7% or lower unemployment rate.


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