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).
Managing Director, Investment Management Group
|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||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%||—|
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