US Jobs Report Shows Positive Trend for Dollar, Unemployment Rate Rises

One sentence summary – The latest jobs report in the US showed positive trends for the US dollar, with gains against the euro and Japanese yen, as employers added 187,000 jobs in August, surpassing expectations, although the unemployment rate rose to 3.8% and average hourly earnings fell slightly below expectations; market expectations for the Federal Reserve’s upcoming meeting have shifted, indicating a 93% likelihood that rates will remain unchanged in September, suggesting confidence in the labor market’s strength; the jobs report was impacted by a Hollywood actors’ strike and the bankruptcy of trucking firm Yellow, and without these factors, payrolls would have increased by around 241,000; the US manufacturing sector continues to face challenges, with a contraction for the 10th consecutive month in August, although the pace of decline appears to be slowing; in the euro zone, weaker economic growth may bring down inflation faster, and the European Central Bank has a range of options to consider at its next interest rate meeting, with money markets pricing in a 79% likelihood that rates will remain unchanged.

At a glance

  • The US dollar gained against the euro and Japanese yen in the latest jobs report.
  • Employers added 187,000 jobs in August, surpassing expectations.
  • Unemployment rate rose to 3.8%, higher than the expected rate of 3.5%.
  • Average hourly earnings rose by 4.3% for the year, slightly below expectations.
  • The dollar index rose by 0.58% to 104.23.

The details

The latest jobs report has shown a positive trend for the US dollar, which gained against the euro and Japanese yen.

In August, employers added 187,000 jobs, surpassing expectations for a gain of 170,000.

However, the data for July was revised lower, indicating that 157,000 jobs were added instead of the previously reported 187,000.

Despite the increase in job numbers, the unemployment rate rose to 3.8%, surpassing the expected rate of 3.5%.

On a positive note, average hourly earnings rose by 4.3% for the year, although it fell slightly below expectations for a 4.4% gain.

The performance of the US dollar can be seen through the dollar index, which rose by 0.58% to 104.23.

Meanwhile, the euro fell by 0.59% to $1.0779, and the greenback rose by 0.42% to 146.145 Japanese yen.

Market expectations for the Federal Reserve’s upcoming meeting have shifted, with Fed funds futures traders now indicating a 93% likelihood that the central bank will leave rates unchanged in September.

This suggests confidence in the labor market’s strength despite signs of it coming into better balance, as highlighted by Fed Bank of Cleveland President Loretta Mester.

In other news, the jobs report was impacted by a strike by Hollywood actors and the bankruptcy of trucking firm Yellow.

It is estimated that without these one-time drags, payrolls would have increased by around 241,000 in August.

The manufacturing sector in the US continues to face challenges, with data showing a contraction for the 10th consecutive month in August.

However, the pace of decline appears to be slowing.

Looking at the euro zone, weaker economic growth may bring down inflation faster, according to European Central Bank policymaker Boris Vujcic.

The ECB has a range of options to consider at its next interest rate meeting, as mentioned by ECB policymaker Francois Villeroy de Galhau.

Currently, money markets are pricing in a 79% likelihood that the ECB will leave rates unchanged at its September meeting.

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cnbc.com
– The dollar gained against the euro and Japanese yen after the August jobs report showed a still strong labor market.
– Employers added 187,000 jobs in August, above expectations for a 170,000 gain.
– Data for July was revised lower to show 157,000 jobs added instead of the previously reported 187,000.
The unemployment rate rose to 3.8%, above the expected 3.5%.
– Average hourly earnings rose by 4.3% for the year, below expectations for a 4.4% gain.
The dollar index was up 0.58% at 104.23.
The euro fell 0.59% to $1.0779.
The greenback rose 0.42% to 146.145 Japanese yen.
– Fed funds futures traders are now pricing in a 93% likelihood that the Federal Reserve will leave rates unchanged at its September meeting.
The U.S. labor market remains strong despite signs of it coming into better balance, according to Fed Bank of Cleveland President Loretta Mester.
– A strike by Hollywood actors and the bankruptcy of trucking firm Yellow impacted the jobs report.
– Without these one-time drags, payrolls would have increased by about 241,000 in August.
– U.S. manufacturing contracted for a 10th straight month in August, but the pace of decline continued to slow.
– Weaker economic growth could bring euro zone inflation down faster, according to European Central Bank policymaker Boris Vujcic.
The ECB has a range of options at its next interest rate meeting, according to ECB policymaker Francois Villeroy de Galhau.
– Money markets are pricing in a 79% likelihood that the ECB will leave rates unchanged at its September meeting.

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