Analysis team at the Royal Bank of Scotland notes that the US non-farm payrolls surprised on the downside in August, rising a tepid 130k, while the June and July were also marked down.

Key Quotes

“Taking into account temporary hiring for the 2020 census survey, the headline figure for August is overstated. The unemployment rate was unchanged at 3.7% in August. Encouragingly, the participation rate ticked higher to 63.2 last month , signalling more workers entered the labour force – a good sign for US growth near-term. Average earnings posted a decent 3.4% increase y/y in August.”

“Alongside modest inflation, real incomes increased healthily last month. The consumer appears alive and well, at least for now, lessening the chances of a 0.5% Fed funds cut later this month.”