US Adds 162,000 Jobs in August, Topping All Estimates

Summary

The August US jobs report came in stronger than expected, with nonfarm payrolls rising 162,000 and the unemployment rate flat at 4.1%. Positive revisions and a rebound in hourly earnings reinforced labor market strength, reviving debate about further Federal Reserve rate hikes. Markets reacted with higher front-end Treasury yields and lower equity futures, treating good economic news as bad news for stocks.

• August nonfarm payrolls rose 162,000, topping all Bloomberg survey estimates.
• Unemployment rate held at 4.1% while labor force participation rose to 61.6%.
• Prior months were revised up by a net 55,000; July flipped from -23,000 to +21,000.
• Average hourly earnings rose 0.3% m/m and 3.1% y/y, rebounding from July.
• Front-end Treasury yields rose, with two-year yields up nearly seven basis points and reclaiming 4.40%.
• Equity futures fell, with the S&P 500 down about 0.25% and Nasdaq trimming gains.
• The report revived Fed rate-hike chatter despite the unchanged unemployment rate.
• Job gains were concentrated in leisure/hospitality, local government, and health care; information jobs fell.