September 6, 2019 Headlines

Treasury prices are modestly lower as investors digest the August payrolls report, as well as additional stimulus from the Chinese central bank. Regarding the latter, the PBOC lowered the reserve requirement for banks 50 bps, which was not terribly surprising, but the decision to cut reserve requirements for small and mid-size banks by an additional 100 bps was more unexpected.

Nonfarm payrolls added 130,000 jobs in August, 30,000 less than expected, and the prior two months were revised lower by an aggregate 20,000 jobs. The headline unemployment rate held steady at 3.7% with both household employment and the official labor pool increasing by more than 550,000. While payrolls growth was weaker than expected, wage growth surprised to the upside. Average hourly earnings rose 0.4% m/m (0.3% expected), and on a year-over-year basis, wages were up 3.2%, which was 20 bps above expectations. Moreover, the average work week increased to 34.4 hours (higher hourly earnings and more hours worked).

Jason Haley
Managing Director, Investment Management Group

Date Event Survey Actual Prior Revised
9/6/2019 Change in Nonfarm Payrolls 160k 130k 164k 159k
9/6/2019 Two-Month Payroll Net Revision -20k
9/6/2019 Change in Private Payrolls 150k 96k 148k 131k
9/6/2019 Change in Manufact. Payrolls 5k 3k 16k 4k
9/6/2019 Unemployment Rate 3.70% 3.70% 3.70%
9/6/2019 Average Hourly Earnings MoM 0.30% 0.40% 0.30%
9/6/2019 Average Hourly Earnings YoY 3.00% 3.20% 3.20% 3.30%
9/6/2019 Average Weekly Hours All Employees 34.4 34.4 34.3
9/6/2019 Labor Force Participation Rate 63.20% 63.00%
9/6/2019 Underemployment Rate 7.20% 7.00%










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