From our colleagues at our sister company, Argent Trust:
In this morning’s data, the economy added 315,000 jobs in August, slightly more than expected. The Retail Trade industry was relatively strong, while the Motor Vehicles and Parts industry was weak. The Unemployment Rate ticked two-tenths higher to 3.7% and the Labor Force Participation Rate at 62.4% is also higher than expected and higher than the previous month. Average Hourly Earnings increased 0.3% in August, less than expected and two tenths lower than the previous month and Average Weekly Hours were 34.5 which is one tenth lower than last month’s figure.
Overall, a decent headline number coupled with the unemployment rate ticking higher as individuals entered the labor force. In addition, the participation rate increasing and earnings slightly cooler than expected are somewhat welcomed by the Federal Reserve as they try to address inflation with interest rate increases and further reductions to their balance sheet. Despite these financial tightening efforts, the labor market remains resilient even as other parts of the economy have weakened, such as housing. Per recent speeches, the Federal Reserve is likely to remain steadfast in tightening its policy until they are fully certain elevated inflation is contained and no longer a concern for the economy.
Following the release of the jobs report, U.S. 10-year treasury yield ticks higher and equity futures are also higher as we head into the market open.
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