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August Payrolls Miss, Rise Only 173K, Even As Prior Revised Higher; Hourly Earnings Rise More Than Expected
The "most important and anticipated payrolls number ever", or at least since the last payroll number, is out and it is a doozy at only 173K, it is a huge miss to the 217K expected (and almost in line with LaVorgna's forecast). This was the worst monthly payrolls number since March, and the second lowest number in 19 months. However, the curious twist is that the July and June NFPs were both revised higher to 245K, making the net revision up 44K.
The Household survey calculated the increase in employed workers an almost equal 196K, rising to 149,036,000, which doesn't tip the scale in either direction.
The unemployment rate dropped to just 5.1%, below the 5.2% expected, and well below July's 5.3%, further boosting the Fed's case that labor slack is evaporating.
And while the headline NFP would be enough to assure no September rate hike, it was the average hourly earnings which jumped 0.3%, above the 0.2% consensus, and above July's 0.2% that may be the indication that September is still on the table after all. On an annual basis, the average hourly wages rose 2.2%, but the average weekly wages posted a 2.5% increase, the best since February.
Going back to LaVorgna hitting the number almost spot on: if he was right about the print, he may also be right about the upward revision in coming months, which means the Fed will likely look past the headline weakness and focus on the stable, if not really improving, wage trends.
The breakdown from the report:
Total nonfarm payroll employment rose by 173,000 in August. Over the prior 12 months, employment growth had averaged 247,000 per month. In August, job gains occurred in health care and social assistance and in financial activities. Employment in manufacturing and mining declined. (See table B-1.)
Health care and social assistance added 56,000 jobs in August. Health care employment increased by 41,000 over the month, with job growth occurring in ambulatory health care services (+21,000) and hospitals (+16,000). Employment rose by 16,000 in social assistance, which includes child day care services and services for the elderly and disabled. Over the year, employment has risen by 457,000 in health care and by 107,000 in social assistance.
In August, financial activities employment increased by 19,000, with job gains in real estate (+8,000) and in securities, commodity contracts, and investments (+5,000). Over the year, employment in financial activities has grown by 170,000.
Employment in professional and business services continued to trend up in August (+33,000) and has increased by 641,000 over the year.
Employment in food services and drinking places continued on an upward trend in August (+26,000), in line with its average monthly gain of 31,000 over the prior 12 months.
Manufacturing employment decreased by 17,000 in August, after changing little in July (+12,000). Job losses occurred in a number of component industries, including fabricated metal products and food manufacturing (-7,000 each). These losses more than offset gains in motor vehicles and parts (+6,000) and in miscellaneous durable goods manufacturing (+4,000). Thus far this year, overall employment in manufacturing has shown little net change.
Employment in mining fell in August (-9,000), with losses concentrated in support activities for mining (-7,000). Since reaching a peak in December 2014, mining employment has declined by 90,000.
Employment in other major industries, including construction, wholesale trade, retail trade, transportation and warehousing, and government, showed little change over the month.
Bottom line: something for everyone in this report.
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Same old same old… Job wise, the economy is still way behind.
Layoff / Closing List: http://www.dailyjobcuts.com
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Cooked number is cooked.
At least they got a report out.
As usual......wait for the revisions.
The number is "crooked", there, fixed it for yah.
I know, right? I mean, at this point, we know most (if not all) "official" numbers are meaningless as the equations and methods to arrive at those numbers have been so manipulated as to be unintelligible. So why do we worry about these numbers? Is it just something the Tylers report so we can all have a good laugh or reiterate just how out of touch the powers that be are with reality?
I wonder if 5.1%, which used to be a smoking-hot low rate, will be good enough to warrent a puny rise in interest rates? Probably they'll need to sit on their thumbs a little longer. LOL
We should see wages rise and official inflation with it just about any day now....
Surprised it wasn't under 100,000. Big global correction ahead.
it's a miracle
It's a SUPER-MEGA-MIRACLE-3000 ...
(100% OFF SALE COMING VERY SOON!)
"Bless the whiskey for its competence as confessor." - Dr. Freckles
Unemployment rate falls to 5.1%. Soon that number will be negative
Fed- "Yes not only is the number -10% but also they are all making 50k a year at each of the 3 part time jobs they have".
all on the table, table is missing one leg ...
Does not compute. Does not compute.
They will still raise rates, they are traped
You mean "trapped" ...
(and yes - they are dude)
t-raped, T stands for treasuries
ANAL-YELLEN
(the next big porn film)
I think they mean they are "tapped" out....the keg is empty, the last drop of whiskey has been poured...
I think he REALLY MEANT he wanted to "tap that ass" ...
(Janet Yellen)
(Olde Fashioned Greasy)
Groggy at the time, slept on the couch. No sleep
They will still raise rates
They'll scream about raising rates.....but they don't dare do it.
:shocked expression:
NO HIKE FOR YOU! [/fed soup nazi]
Defeat snatched from the jaws of victory
CTRL + F and CTRL + H, problem fixed
Market will call them on their bluffing, tanks this bitch
hip, hop, hurray!
Yes they can lie beyond belief.
Total fiction as normal.
The Fed will now be forced to implement "Rule Nine " (from outer space).
rate hike on double secret probation
In other news 174K Syrian refugees just set sail for.......in the last 3 minutes.
We are so fucked
Maybe not me but Im sure they will be in NY painting my house and cutting my grass shortly
HOORAY!
MONSANTO BUTT-CANCER NUGGETS FOR EVERYONE!
More games by the tribe!
Definitely time to take cover. This sh!t isn't funny anymore. Downright scary!
Jizzy Joe called it right, he went for 170k!
Revised to 300k next month. We forgot a variable in our formula. Our bad haha
Rate hike in September + QE in October (with the Fed buying up corp bonds + USTs) incoming.
"5.1%"
By the time Obozo moves down the street, the number will be around 2%.
His ball washers in the MSM will proclaim that Obozo was the greatest "job" creator in the USSA's history!
All hail Obozo!
What fast food resturant is doling the hiring?
Jimmy John's ...
(shit sandwiches - but their delivery sucks too)
https://www.youtube.com/watch?v=0QtpgKxPFAg
If they raise rates this Sept, they can blame any market losses on seasonality later on and people will be like oh yeah, that's OK. Funny though, the algos don't seem to know what to do with this data today.
It's the Friday trading day heading into Labor Day weekend.
The PPT will have an oversized impact. Too bad we'll never know the details..........
Some FEDists might have started to understand that they are WAYYYYY behind the curve and can do absolutely NOTHING if this sucker goes down.
So they will act (as in "act": https://www.youtube.com/watch?v=QQOWp3tLb2s)
And together with a 0.25 rate "hike" they will announce QE4 at the same time.
Totally schizo.
But hey: Markets will love it, so who cares?!
http://www.reuters.com/article/2015/09/04/us-markets-global-bonds-analys...
Investor flight from U.S. stocks fails to lift bond market
NEW YORK | By Gertrude Chavez-Dreyfuss
The "flight to safety" into bonds many expected when U.S. stocks slumped last week never took off, making big losers out of prominent fund managers and further confusing investors at a volatile time in the market.
Stocks plunged in the second half of August, largely on fears of China's worsening economy, but U.S. Treasury yields did not see the kind of safety bid that many were expecting and has been typical in times of stock-market stress in the past.
Strategists link the lack of a move to bonds to a number of events: Hawkish rhetoric from Fed officials even as the equity market stumbled; a bout of selling by hedge funds that had expected a rally in the bond market that they didn't get; and bond sales by central banks in China and other emerging market economies trying to protect their currencies from depreciating.
Reduced appetite from overseas, along with the outlook for the Fed, will be crucial in coming weeks if equities fall again and bonds don't respond. The Fed decision on September 17 could mark the first rate increase in almost a decade, and uncertainty surrounding that decision is likely to keep many in the bond market on the sidelines.
"The correlation between bonds and stocks is more situational now because it's the central banks calling the shots," said Robert Vanden Assem, head of developed markets investment grade fixed-income at PineBridge Investments in New York.
During the recent U.S. stock market sell-off in the third week of August, for instance, the S&P 500 .SPX dropped 9 percent, but U.S. 10-year Treasury yields, which move inversely to prices, fell by only 12 basis points.
That's not typical. According to Bank of America Merrill Lynch, the relationship between stocks and bonds that has held since 2009 suggests 10-year yields should have declined by 22 basis points.
Bond yields since then have drifted higher and buying interest has been minimal. The lack of a rally in the U.S. Treasury market made big losers out of notable hedge funds, including Bridgewater Associates' All-Weather Fund, which fell 4.2 percent in August.
These funds borrowed heavily to augment their returns, but as things became turbulent, that leverage generated losses that forced them to wind down that borrowing.
Strategists say part of what kept Treasury yields from reflexively falling through a run to safe-haven debt were hawkish signals from the Fed, particularly Fed Vice Chair Stanley Fischer.
At last week's central bank gathering in Jackson Hole, Wyoming, several Fed officials, including Fischer, seemed to boost the odds on a rate increase if not in September, then certainly in December. The message the Fed delivered over the weekend came between a Friday and Monday that saw the U.S. Standard & Poor's 500 lose 7 percent of its value.
Leading brokerages, including Citigroup and Bank of America, commented that though it's a close call, the odds favor an increase in the next few weeks.
"Unless the U.S. economy shows signs of slowing, the bond market is likely to keep yields relatively firm," said Alan Gayle, director of asset allocation at RidgeWorth Investments, even if the S&P 500 falls in the weeks ahead on concern about growth in China and other emerging market economies, he said.
Interest rate futures this week saw a more than 50 percent chance of a rate hike in December FFZ5 and a 28 percent probability in September FFU5, according to CME Group's FedWatch program.
If that happens, bonds won’t look as attractive. Higher interest rates diminish the value of an investor's bond holdings, resulting in lower portfolio returns.
"Treasuries have been a good diversifier to portfolios, but their benefit as a diversifier has been reduced because yields are already extremely low and the Fed is starting to normalize rates," said Rick Rieder, chief investment officer of fundamental fixed income at BlackRock in New York.
CHINA, CURRENCY INTERVENTIONS
Further supporting yields on U.S. Treasuries was the sell-off in reserves by China and other emerging market economies to shore up their slumping economies. U.S. Treasuries represent the bulk of the Chinese and emerging market reserves.
Fears over weakened growth prospects and plunging commodity prices in some emerging markets have taken a toll on their currencies. As China sold currency reserves in recent months, real yields have moved higher since the beginning of the year, while inflation expectations have declined.
China and emerging markets led the build-up in global foreign exchange reserves following the 1997 Asian crisis to a peak of $12 trillion last year. This cash pile shielded them from the 2007-08 crisis, and it looks as if it is once again being deployed.
It's not clear whether China has sold U.S. Treasuries over the last month, or if so, how much. Bank of America Merrill Lynch speculated in a research note that if China sold between $7 billion to $10 billion a day of U.S. Treasuries in the three weeks since the Chinese yuan devaluation on Aug. 11, it might have dumped as much as $150 billion in U.S. government bonds.
These are large numbers given the fact that the total net issuance of Treasuries this year will only be about $500 billion, said Bank of America Merrill Lynch in its research note. As of June 2015, China held $1.27 trillion in U.S. Treasury securities, according to capital flows data from the U.S. Treasury Department.
"The presence of central banks within our markets is over-riding and it's all-encompassing and has driven the activity since 2008," said PineBridge's Vanden Assem.
And Kevin Henry has pushed turned the nob to hyper burst speed!
US economy smokin. Full employment, skyrocketing wages and no inflation. I'm impressed.
Not.
They told us that Obama would save the economy. If you do not have a job, just leave the country and sneak across the board illegally and Obama will give you everything you want.
In all seriousness, I have had that conversation with my self employed contractor buddies.
We ALL agree, we could do much better if we were off the radar, undocumented, special class, hands off, laws don't apply, nobody checking, no IRS, politically advantaged........workers.
If you grew up with dirt floors, slept with chickens and had no plumbing, America, today, is Heaven on Earth.
If you were born here. You are pretty much fucked.
It's a Goldilocks' number-not too hot and not too cold. The Fed wants to leave open the door to raise rates and also leave the door open to not raise rates. Have your cake and eat it too.
"...nearly 22 percent of Americans said jobs were plentiful in August." Nearly 22 percent? Well, I guess jobs ARE plentiful then.
Peak everything. Can every f***ing person in America be a waiter or greeter? Can they all afford bubble-priced McMansions on McD's pay? And a Lexus and Beemer too? How can this work? Better off sitting at home on the couch and collecting free govt stuff. The sicker you become, the bigger the disability check. The Fed is totally trapped now. They keep talking rate hike because they need room to cut again. But any hike will be more than this illusion of 'recovery' can handle. Car sales will plunge with the channels already stuffed. Home sales once again will plummet as people walk away from their bubble mistakes. The banks will demand bailouts.
The only way out is to purge the excesses from the system…no pain, no gain. And there will be lots of pain. Without the market bubble, people will be afraid and stop buying stuff they can’t afford. Already buried in debt, more will lose their jobs and fail… To the typical American, future planning means the next 72 hours. So, the stock market must go up every day to keep them feeling good about the economy and borrowing and buying.
Millions of immigrants are not new customers for the oligarchs, only a massive drain of diminishing resources. Government debt is skyrocketing and “austerity” will only speed the collapse. Congress and the president know only spending…nothing else…as the voters demand handouts.
We need Trump! Run this bloated government like a business…you don’t contribute…you get nothing!
Considering the data Tyler described above which is on par for just about every other release in the past umpteen years that the Fed has been putting positive spins on things, exactly what WILL a 0.25% rate hike do for the average person?
I can't see anything at all but well that is my opinion. What about a 2.5% rate hike? Still nothing. What about if it is up to 5%? Still not a lot. What savings do people have to start to take advantage of the rate? They have none. What about 10%? Well maybe a bit of good interest would help savers and restore some sanity but well there is this thing about debt which would likely have exploded long before rates reached even 4%.
So in my opinion all this talk about a rate hike is just BS to me. It will change nothing for millions of people. Might effect the Fed a bit carrying about 5 trillion in debt but well when you can print your own money who cares right?