Jobs Data Largely A Non-Event

Non-farm payrolls increased by a more modest 157,000 in July but the preceding two months were revised up by a cumulative 60,000. Analysts were expecting a 193k increase, the shortfall was in the service sector, specifically government shedding jobs. Manufacturing and construction jobs surged. Against this backdrop, the services share of total employment is at its lowest level since August 2009.

There are widespread stories of labor shortages, especially in the manufacturing sector, jobs that are typically high paying jobs. The question at hand is the potential trade war. Will the war of words morph into policy that could threaten jobs?

Wages met the consensus view of a 0.3% increase. There is growing acceptance in regards to the view that the anemic labor participation rate (LPR) is a major reason why wages are not accelerating at current unemployment levels.

Speaking of which, the unemployment rate fell back to 3.9%, as the household survey measure of employment increased by 39,000, easily outpacing a 105,000 increase in the labor force.

In my view, the data is consistent with GDP growth with a “mid-three handle.”

Equities were mixed on the data.

What will happen this week? The economic calendar is relatively sparse thus suggesting the markets will move on headlines.

Last night the foreign markets were mixed. London was up 0.07%, Paris was up 0.15% and Frankfurt was up 0.48%. China was down 1.29%, Japan was down 0.08% and Hang Sang was up 0.52%.