A brief comment on today’s NFP report — brief only because a 4 day weekend and the beach is becking me.
Non-farm payrolls rose by 169,000 in August — well below the 242,000
increase recorded in July, and below the 190k consensus. Note that we require about 150,000 new jobs/month merely to keep up with population growth. That makes today’s data mild to mediocre.
The pace of hiring slowed in August, and wage increases to workers were also smaller. The WSJ described this as "extending the pattern of growth and slowdown that Federal Reserve policymakers have linked to oil prices."
June and July data were revised upwards by 44,000 more non-farm jobs in than previously estimated. The Birth/Death adjustment for August was 132,000, compared with last August’s 123,000. (Note that this is NOT additive on a one-for-one basis, but enters the model further upstream — the net impact is to impart a positive bias, but not nearly a 132k gains).
Unemployment rate dropped to a four-year low of 4.9% (its derived from a survey of households rather than businesses). BLS also noted that the growth of average hourly earnings slowed to a 0.1% rate in August.
WSJ: "The Labor Department said Katrina had no effect on its numbers for August, because the jobs data were gathered before the hurricane struck."
Employers Added 169,000 Jobs In August; Jobless Rate Declined
By JOSEPH REBELLO and NICOLAS BRULLIARD
DOW JONES NEWSWIRES
September 2, 2005 8:36 a.m.