US job growth accelerated in August but missed expectation – NFP

Today’s NFP report, the most significant of few reports from the US labor sector released this week, showed that nonfarm payrolls increased by 142,000 jobs in August, compared to downwardly revised July figure (89K from initial 114K), but missed consensus for 164,000 increase.

The same report showed that unemployment decreased to 4.2% in August from 4.3% previous month, marking the first drop after four straight monthly increases which pushed the jobless rate to the highest in three years.

August unemployment was in line with expectations.

The last of three key parameters from today’s labor report – average hourly earnings, increased 0.4% month on month, following a downwardly revision of July’s figure to -0.1% from 0.2%, while annualized figure rose to 3.8% in August from 3.6% previous month and ticked above 3.7% forecast.

August numbers signal that still solid wage growth would contribute to consumer spending and continue to underpin the economy.

Overall, the data reduce concerns about disorderly weakening of the US labor market, but rather controlled slowdown which would add to expectations for less aggressive Fed’s decision in September policy meeting (current bets show 57% for 0.25% rate cut and 43% for 0.5% cut).