Announced this morning, the economy added 162,000 jobs in August, more than expected, and the previous month was revised higher as well. Reviewing the individual categories, the Leisure and Hospitality industry was relatively strong, while the Information industry and Financial Activities industry were relatively weak. The Unemployment Rate held steady at 4.1%. Average Hourly Earnings increased 0.3% in August, as expected, and grew 3.1% on an annual basis, one-tenth less than the previous month. The Labor Force Participation Rate was 61.6%, slightly higher than expected and two tenths higher than the previous month. In addition, Average Weekly Hours were 34.4, one tenth higher than the previous month.
Overall, a strong report with a much higher increase in headline jobs than expected in August, a higher revision to the previous month, and no change to the unemployment rate. Strength in job increases in the hospitality industry was offset somewhat by weakness in the information and financial services industries. Average hourly earnings increased more than in the previous month, but the annual figure remains below the 30-year average. Finally, labor force participation and average weekly hours inched higher.
The labor market appears to be in decent shape amidst ongoing immigration policy and companies likely remaining hesitant, considering the upcoming mid-term elections and the ongoing geopolitical events in both Iran and Ukraine. Annualized inflation measures remain slightly above annual wage increases, suggesting ongoing pressure for consumers who rely on their income to fund daily activities. As the Federal Reserve contemplates tighter monetary policy per recent speeches, how consumers hold up is still a key factor for the economy and markets in the coming weeks.
In all, the yield on the 10-year US Treasury is higher this morning following the report and equity futures are mixed as we head into the market open.
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