According to the Establishment survey, employment showed a 151k advance compared to consensus of 180k and our more bullish 200k forecast. Private-sector employment was up only 126k while the two-month net revisions were -1k. Manufacturing employment fell 14k, in accordance with the employment subcomponent falling well below 50 according to the August ISM manufacturing report.
Wage growth was on the low side too with its 0.1% advance compared to the consensus forecast of 0.2%. Here we are looking for a rebound in September since a calendar quirk was the likely culprit. Compared to its level a year ago, average hourly earnings is 2.4% higher, down from 2.7% in July. While base effects will depress yearly wage growth in the near term, there is still a fair chance that earnings growth will approach 3% already at the turn of year. But that is a forecast as opposed to a present day reality and as such wage growth is not suggesting much urgency to hike rates in the very near term in our view.
Adding to the negativity, average weekly hours fell back from 34.4 to 34.3 while the unemployment rate held steady at 4.9% instead of falling to 4.8% as expected.