(As of 7:30 am PST)
This morning’s release of the Labor Department’s monthly
nonfarm payrolls report has caught investors by surprise. Stocks declined early after the highly
anticipated jobs report showed a disappointing decline in the number of private
sector jobs added in August. Only
142,000 jobs were added last month, snapping a 6 month streak in which the
economy added more than 200,000 jobs per month.
Hiring slowed the most in the retail and auto sectors while other
industries added workers, but at a slower pace.
Downward revisions to June and July’s jobs report added to the
negative sentiment. Meanwhile,
unemployment ticked a notch lower, from 6.2% to 6.1%. The drop likely came as a result of the fact
that more workers dropped out of the labor force in August. An important measure, known as the labor force
participation rate, dipped to 62.8% matching a 26 year low. Today’s jobs report
has investors wondering what this means for the Fed’s interest rate hike. An
improving economy has led many to believe the Fed’s decision to raise rates may
come sooner than later. Interest rates
fell sharply today with the 10 yr. treasury yield dipping to below 2.4%. It looks like we could be in for a disappointing day today.
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