Intermoney | Payrolls grew by only 22,000 (well below the 75,000 expected by consensus) compared to 79,000 in July. Although there were upward revisions in the previous two months of 29,000, this barely masked the fragility we have seen in recent months. In fact, average employment growth over the last three months is less than 30,000. Before going into detail, it should be noted that the response rate was abnormally low even for August, at 56.7%, while the seasonal adjustment seems unusually large, making a revision in the coming months more than likely. In fact, August payrolls traditionally tend to be revised upwards in subsequent readings, with a median of 27,000. A 25 bp cut at next week’s Fed meeting is fully priced in. Some bets are calling for a 50 bp move, and although this is not the most likely scenario, this report could encourage dissenting members to lean towards such a move. However, we continue to lean towards the view that the bank will cut 25 bp, as there remains a cautious stance regarding the uncertainty surrounding the impact of tariffs on inflation.
Average US job growth over last three months falls short of 30,000 jobs
