BlockBeats news, on September 5, analysts noted that U.S. non-farm payroll employment increased by 162,000 in August, significantly exceeding the market expectation of 56,000, with prior months’ figures revised upward by a total of 55,000—July’s non-farm payrolls were revised from a decline of 23,000 to an increase of 21,000. However, after excluding one-time factors such as rebounding employment in leisure and hospitality and government education sectors, underlying job growth in August was approximately 60,000, indicating that the overall labor market is not as robust as the headline data suggests.
The report showed that the unemployment rate remained at 4.1% in August, the labor force participation rate rose back to 61.6%, and the broader U-6 unemployment rate declined from 7.9% to 7.7%, indicating that the return of labor supply continues to be absorbed by business demand, with improved job quality. However, the year-over-year growth rate of average hourly earnings further slowed to 3.1% from the prior value of 3.2%, below the 3.4% CPI growth rate in July, suggesting that the labor market has not overheated again.
Regarding Fed policy, Guangfa Macro believes that the August non-farm payrolls data simultaneously refutes two extreme narratives—“labor market collapse” and “labor market overheating”—but objectively increases the probability of a rate hike this year, as the resilience of the labor market reduces concerns about further policy tightening. However, whether a rate hike occurs in September will still depend primarily on the upcoming August inflation data.
On the market side, after the data release, the implied probability of a September rate hike according to FedWatch rose from 50% to 58.6%. The yields on the 2-year and 10-year U.S. Treasuries increased by 4 and 1 basis points, respectively, to 4.37% and 4.78%. U.S. stock indices closed slightly lower, but the AI hardware sector rebounded strongly, with the Philadelphia Semiconductor ETF (SOXX) rising 3%.