• Payroll employment rose 156,000 in August with 41,000 worth of downward revisions to June and July gains combined.

• The unemployment rate ticked up to 4.4% from the cycle-low 4.3% in July

• Labor force participation rate unchanged at 62.9%

• The annual increase in average hourly earnings was 2.5% for a fifth straight month.

• Fed likely to continue tightening on strong jobs report

Job growth in the US came in well below estimates in the month of August. Employers added only 156,000 jobs in August as compared to expectations for an increase of about 180,000 jobs, as the pace of hiring slowed. The Labor Department also said the job growth in June and July was downwardly revised to 210,000 jobs and 189,000 jobs, respectively, reflecting a net downward revision of 41,000 jobs, suggesting that the labor market is not quite as strong as it appeared to be a month ago.

Still, the report shows job growth spread across most of the economy, with nearly two-thirds of industry sectors adding jobs during the month. Among the winners were construction, which added 28,000 jobs, health care, which added 20,200 jobs, and auto plants, which added 13,700 jobs. Among the losers were federal, state and local governments, which trimmed a total of 9,000 jobs.

The unemployment rate rose marginally by 0.1 percentage points to 4.4%, while the participation rate stood flat at 62.9%, pointing that the economy still operates under full employment conditions. Nominal average hourly earnings rose 0.1% mom in August and are up 2.5% yoy. While job growth remains strong, earnings continue to hang in this mid-two percent pace. The softer inflation readings and weak productivity numbers have limited the gains in nominal wage growth.

Source: BIMB Securities Research - 5 Sept 2017