U.S. Economy Added a Stronger-Than-Expected 162,000 Jobs in August as the Labor Market Bounced Back
Key Takeaways
- •The U.S. economy added 162,000 jobs in August, well above the consensus estimate of 56,000.
- •The unemployment rate held at 4.1%, in line with both economist expectations and July's reading.
- •Bitcoin fell roughly 2% to below $80,000 and the 10-year Treasury yield rose 3.3 basis points to 4.80% after the release.
- •Fed Chairman Kevin Warsh signaled openness to a September rate hike at Jackson Hole, while Governor Chris Waller and New York Fed President John Williams suggested it was not a done deal.
- •Next Friday's August Consumer Price Index report is likely to be the key factor in the Fed's rate decision.
The U.S. labor market strengthened appreciably in August, handing the growing group of hawks at the Federal Reserve additional ammunition to raise interest rates at the central bank's policy meeting in less than two weeks.
According to the government's Nonfarm Payrolls report released Friday morning, the U.S. economy added 162,000 jobs last month. That figure was well above the consensus estimate of 56,000 and followed the addition of 21,000 jobs in July, a number revised upward from an originally reported decline of 23,000. The Nonfarm Payrolls report, published by the U.S. Bureau of Labor Statistics, is one of the most closely watched indicators of employment conditions in the United States.
The unemployment rate came in at 4.1%, matching both the 4.1% expected by economists and July's 4.1% reading.
The report carries particular weight because employment is one half of the Fed's dual mandate, which tasks the central bank with fostering maximum employment alongside price stability. Strong job gains are typically read as evidence of economic resilience, which can keep upward pressure on wages and prices and, in turn, influence the interest-rate path.
Market reaction
Reaction in financial markets was swift. Bitcoin tumbled about 2% to below $80,000, while the yield on the U.S. 10-year Treasury note jumped 3.3 basis points to 4.80%. U.S. stock index futures traded modestly lower. Risk assets such as cryptocurrencies and equities have repeatedly moved on employment data in recent years, as traders reposition around expectations for the direction of monetary policy.
Will they, or won't they
Federal Reserve Chairman Kevin Warsh put a September rate hike firmly on the table one week ago with his hawkish speech at the Jackson Hole economic symposium, the Fed's traditional annual gathering in Wyoming.
However, Fed Governor Chris Waller — with an assist from Federal Reserve Bank of New York President John Williams — sent markets surging earlier this week by suggesting that a rate hike at the central bank's policy meeting in two weeks was far from a done deal.
This morning's jobs report is another data point in favor of the hawks. Still, the key figure likely to determine the Fed's decision is next Friday's Consumer Price Index (CPI) report for August.
Source: CryptoNewsNet, via CoinDesk
