The US economy continues to produce more jobs despite being close to full employment. The unemployment rate has remained at or under 4% since April 2018 while annual increases in hourly pay have remained above 3% for eleven consecutive months. This latest employment report indicates the US still has an expanding labour market, in spite of international trade worries and a central bank which has just cut its official rate.
According to the US Bureau of Labor Statistics, the US economy created an additional 130,000 jobs in the non-farm sector in August, less than July’s revised increase of 159,000 and under the 165,000 increase which had been expected. Employment figures for June and July were also revised down by a total of 20,000.
The unemployment rate remained unchanged at July’s rate of 3.7% as the total number of unemployed decreased by 19,000 to 6.044 million while the total number of people either employed or looking for work increased by 571,000 to 163.92 million.
US Treasury yields increased at the short end but remained unchanged or even fell elsewhere on the yield curved. By the end of the day, 2-year Treasury bond yields had gained 2bps to 1.54%, 10-year yields remained unchanged at 1.56% while 30-year yields finished 2bps lower at 2.03%.