Job Growth Slowed but Solid Despite Rising Interest Rates

Barry Adams
02 Sep, 2022
New York City

On Wall Street stocks opened higher after the latest jobs report showed the pace of hiring decline in August, meeting the market expectations. 

Non-farm payrolls increased 315,000 in August following the 526,000 additions in July, the Bureau of Labor Statistics said Friday. 

In a broad-based hiring employers added positions across many industries. 

Professional and business services including computer and system design led the job gains in the month with 86,000, followed by healthcare services with 48,000, retail trade with 44,000 , leisure and hospitality with 31,000 and manufacturing with 22,000. 

Leisure and hospitality sector additions slowed down considerably after adding an average of 90,000 for the last seven months. 

The unemployment rate increased to 3.7% and average hourly wages increased 0.3% from the previous month and 5.2% annually. 

Historically August jobs data are volatile and in the past the statistics agency has revised the data substantially. 

The BLS lowered the job additions in June to 293,000 from the previous estimate of 398,000 and July additions to 526,000 from 528,000.  

The S&P 500 index increased 0.4% to 3,985.42 and the Nasdaq Composite index gained 0.3% to 11,821.86. 

Oil prices rose in the U.S. and European trading ahead of the OPEC+ meeting on Monday. 

Prices rose on the expectations that the cartel will announce production cuts at the gathering of finance ministers. 

Futures of crude oil increased $2.50 to $89.10 a barrel and natural gas fell 27 cents to $8.99 a thermal unit. 

The yield on 10-year Treasury notes  declined to 3.21% and on 2-year notes eased to 3.41%. 

Across the Atlantic, European markets traded higher after the release of the U.S. payrolls report. 

The DAX index increased 2.5% to 12,955.28, the CAC-40 index advanced 1.7% to 6,135.97, and the FTSE 100 index added 1.7% to 7,271.26. 

Producer prices, a measure of wholesale prices, in the euro zone rose 4% in July from the previous month, the eurostat report showed on Friday. 

The 4-month high increase was driven by the 9% surge in energy prices compared to 3% increase in June.  

Asian markets marginally lower ahead of the U.S. jobs report as more cities tighten restrictions to prevent coronavirus outbreak from spreading. 

Shanghai index increased fractionally and indexes in Japan and India declined marginally after volatile trading.