US nonfarm payrolls increased 151k in August, below expectations, following the 275k July surge (revised up from 255k), while June was bumped down to 271k from 292k for a net 1k decline. That left the 3-month average at 232k. The labor force rose 176k with household employment up 97k. The unemployment rate steady at 4.9%. The participation rate was flat as well at 62.8%. Average hourly earnings edged up 0.1% from 0.3% in July. The workweek fell to 34.3 from 34.4 (revised down from 34.5). Private payrolls increased only 126 from 225k previously (revised from 217k) and compares to the ADP’s 177k. The goods producing sector saw a 24k drop in jobs, with construction off 6k and manufacturing down 14k. The service industry saw a 150k increase, paced by education’s 39k increase, with the government adding 25k. The guts of the report are mostly below forecast and are not conducive for a September rate hike.
U.S. trade deficit narrowed 11.6% to -$39.5 bln in July, nearly exactly as forecast, from -$44.7 bln in June (revised from -$44.5 bln). Exports rose 1.9% from 0.8% (revised up from 0.3%), while imports fell 0.8% from 1.9% previously. Excluding petroleum, the red ink amount was -$34.5 bln from -$39.3 bln (revised from -$39.2 bln). The “real” goods balance was -$58.3 bln from -$64.5 bln (revised from $64.7 bln), with real exports climbing 2.9% from -0.3% (revised up from -0.5%), with imports at -1.5% from 1.8%. The report bodes well for Q3 GDP.
The USD weakened on the news; EURUSD moved to 1.1245, capped by the 20 DMA, USDCAD fell to the 50 DMA at 1.3020 and Cable broke the 133.00 handle I mentioned earlier and trades at 1.3330.
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