NFP employment at 187K (vs. Bloomberg consensus 170K), while average hourly earnings y/y up 4.3% (vs. consensus 4.4%). Combined with to June figures and preliminary benchmark revision, we have a picture of a cooler labor market.
Figure 1: Nonfarm payroll employment August release (bold black), July release (blue), Bloomberg consensus assuming no revisions to July series (light blue square), Philadelphia Fed early benchmark sum of states (pink line), BLS preliminary benchmark (red square). Source: BLS via FRED, BLS (8/23/2023), Philadelphia Fed, and author’s calculations.
Consequently, the market’s implied path for the Fed funds rate has dropped over the past week.
Figure 2: Effective Fed funds rate (bold black), CME implied Fed funds as of 8/1 (light green triangle), as of 8/25 (light blue triangle), as of 8/31 (orange square), as of 9/1 1PM central (red square). Source: Fed Board via FRED, CME and author’s calculations.
Even Lawrence Summers is saying we may have that soft landing.
[ emits deep toned groan, the kind of groan that starts up from lower level diaphragm but still doesn’t alleviate the mental nausea ]
Oooh sh!t – now we are all doomed. He is the guy who gets it wrong more often that the flip of a coin.
“average hourly earnings y/y up 4.3%”.
I take this as the nominal increase. I only ask in light of this post from Kevin Drum:
https://jabberwocking.com/weekly-earnings-rose-4-3-in-august/
After adjusting for inflation, average weekly earnings increased at an annualized rate of 4.3% in August:
Hourly earnings barely budged, but average hours worked increased 3.6%. This accounted for nearly the entire increase.