Payrolls Rise 151K In August, Unemployment Rate Steady

The labor market is solid but maybe isn't overheating, at least yet. Nonfarm payrolls rose a lower-than-expected 151,000 in August with revisions to July and June at a net minus 1,000. The unemployment rate holds at 4.9 percent with modest increases on both the employment and unemployment side of this reading. Earnings are very soft in this report, up only 0.1 percent in the month for a year-on-year plus 2.4 percent which is down a sizable 2 tenths from July and isn't pointing to any wage-hike flashpoint. And the workweek is down, at 34.3 hours with July revised 1 tenth lower to 34.4.

Goods producing payrolls are down across the board reflecting weakness in mining, construction and manufacturing. But service sector jobs are once again strong and include further gains for professional & business services as well as a 25,000 increase in government jobs.

There are definitely weak spots in this report though the headline payroll gain of 151,000 is respectable but isn't high enough to give the hawks the advantage at this month's FOMC where a rate hike will, at least, be discussed.

Recent History Of This Indicator:
At a consensus 175,000 in August, nonfarm payrolls are expected to fall back from strong gains of 255,000 in July and 292,000 in June. But even at the lower level, growth would still be consistent with strength in the labor market. In another sign of strength, the unemployment rate is expected to dip 1 tenth to 4.8 percent but, in an offset, average hourly earnings are expected to slip 1 tenth to a modest 0.2 percent.