Today's Report (09/08/2021)

Total nonfarm payroll employment rose by 194,000 in September, and the unemployment rate fell by 0.4 percentage point to 4.8%, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing. Employment in public education declined over the month.

The unemployment rate fell by 0.4 percentage points to 4.8% in September. The number of unemployed persons fell by 710,000 to 7.7 million. Both measures are down considerably from their highs at the end of the February-April 2020 recession. However, they remain above their levels prior to the coronavirus (COVID-19) pandemic (3.5% and 5.7 million, respectively, in February 2020).

The labor force participation rate was little changed at 61.6% in September and has remained within a narrow range of 61.4% to 61.7 percent since June 2020. The participation rate is 1.7 percentage points lower than in February 2020. The employment-population ratio, at 58.7%, edged up in September. This measure is up from its low of 51.3% in April 2020 but remains below the figure of 61.1% in February 2020.

Average hourly earnings for all employees on private nonfarm payrolls rose by 19 cents to $30.85 in September, following large increases in the prior 5 months. In September, average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $26.15. The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.


Market Reaction

DXY - Following the release of the report there was a sharp movement towards the downside in the DXY.

S&P 500 - Following the release of the report there was a sharp movement towards the downside in the S&P500.

Gold - Following the release of the report there was a sharp movement towards the upside in Gold.


What Is It?

Nonfarm Payrolls report measures the number of jobs added or lost in the US economy over the last month, excluding farm workers and workers in a handful of other job classifications. This is measured by the Bureau of Labor Statistics (BLS), which surveys private and government entities throughout the US about their payrolls. The BLS reports the nonfarm payroll numbers to the public on a monthly basis through the closely followed “Employment Situation” report.

Why Is It Important?

The NFP report is a key economic indicator for the United States. It is intended to represent the total number of paid workers in the US minus farm employees, government employees, private household employees, and employees of nonprofit organizations.

What Are The Fundamental Effects?

Wages and salaries from employment make up the main source of household income. The more workers there are, the more they buy and propel the economy forward. If fewer people are working, spending drops off and businesses suffer. Both the Federal Reserve and the markets pay close attention.

How Does It Affect Markets?

CURRENCY - A strong report may drive interest rates higher, making the Dollar more attractive to foreign investors.

STOCKS - For stocks little or no growth in employment is generally bad for stocks. Weak sales shrink corporate income and earnings.

BONDS - A series of weak employment reports reflects a more sluggish economy, which may be bullish for bond prices and interest rates may head lower.