Job Growth Beats Estimates

The Bureau of Labor Statistics reported this morning that, in July, 1.76M jobs were added to Non-Farm Payrolls. This was better than the 1.48M expected and was surprising to many after the ADP report earlier in the week missed big to the downside. Last month’s job creation helped the Unemployment Rate fall to 10.2% from 11.1%; it was expected to fall to 10.6%. Average Hourly Earnings grew by 0.2% and that was a lot better than the fall of 0.5% that was forecast. Year-over-Year, that measure grew by 4.8% against an expectation of just 4.2%. The Labor Force Participation Rate fell, however, to 61.4% from June’s 61.5%. Revisions to prior reports were minimal this time around.

Leisure and Hospitality was the biggest job growth category with 592k jobs being added. Manufacturing was a disappointment with an addition of just 26k. Education and Health Services added 215k jobs.

Investors were bracing for bad news after Wednesday’s ADP report, so this morning’s release is a pleasant surprise. Treasury prices have slipped very slightly with the Ten-Year’s yield not much changed at 0.54%. Gold is off about $13 to $2,050 while crude oil is off around fifty cents to $42.44. Equity futures are slightly in the red. With the Jobs report out of the way, attention will shift to the stimulus negotiations that may or may not continue today between Congressional leaders. Their discussions ended yesterday with no clear path to an agreement.