Non farm payrolls fail estimates, unemployment drops to 7.3% . . . . . . . Non-farm payrolls in the U.S. rose below expectations in August, and job gains in the previous two months were revised sharply lower. Unemployment rate surprisingly fell as more people dropped the labor force. The gain of 169,000 workers last month followed a revised 104,000 rise in July that was smaller than initially estimated. The cuts in job gains in the last two months totaled 74,000 payrolls. Analysts had expected a gain of 180,000 payrolls in August. The unemployment rate, derived from a Labor Department survey of households rather than employers, was forecast to hold at 7.4 percent, but dropped to 7.3 percent last month, owing to more people leaving the workforce. The participation rate , which indicates the share of working-age people in the labor force, declined to 63.2 percent, the lowest since August 1978, from 63.4 percent. Private employment rose 152,000 after a revised increase of 127,000 in July that was lower than initially estimated Manufacturing employment increased by 14,000 after a drop of 16,000 the month before, while analysts had expected a gain of 5,000. The average work week for all workers rose to 34.5 hours from 34.4 hours. Federal Reserve bond buying The disappointing data come as Federal Reserve policy makers are in debate on whether the expansion and job market have improved enough to start slowing the rate of monthly bond purchases, currently at $85 billion. This is the last payrolls report Fed officials will see before this month’s meeting. Policy makers will probably decide to scale back the pace of bond purchases when they next meet. Central bankers had affirmed a pledge on July 31 to continue bond buying until they see signs “the outlook for the labor market has improved substantially.” The Fed has also committed to hold the main interest rate near zero as long as the jobless rate is above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent. Earlier this week, the Institute for Supply Management’s factory index showed manufacturing expanded in August at the fastest pace since June 2011. The group’s gauge of service industries, which cover almost 90 percent of the economy, posted the highest reading since December 2005. Investors now look forward to the Fed’s next policy meeting in September 18-19, with no clear signals on whether the Federal Reserve will start to taper its massive asset purchases program. #egyptyard
Posted on: Fri, 06 Sep 2013 14:26:21 +0000
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