NEW YORK, Sept 3 (Reuters) - U.S. employment fell for a
third straight month in August, but the decline was far less
than expected and private payrolls growth surprised on the
upside, easing pressure on the Federal Reserve to prop up
growth.
STORY: TABLE:
KEY POINTS: * Nonfarm payrolls fell 54,000, the Labor Department said on Friday as temporary jobs to conduct the decennial census dropped by 114,000. * Private employment, considered a better gauge of labor market health, increased 67,000 after a revised 107,000 gain in July. In addition, the government revised payrolls for June and July to show 123,000 fewer jobs lost than previously reported.
COMMENTS: PHIL ORLANDO, CHIEF EQUITY MARKET STRATEGIST, FEDERATED INVESTORS, NEW YORK:
'This was a much better-than-expected report. Not only were the August numbers pretty good but the July numbers were also revised up, that is to say better. The only number here and I don't have the detail is the loss of manufacturing jobs in August which I can't explain. Every other indicator that we've been looking at suggested manufacturing was starting to come back, maybe there is a bit of a lag there. But I'm inclined to think that is a blip and that number comes back in the fall.
'The last fortnight, the data has started to firm. We felt given the expiration of the housing credit and the peak of the census cycle, we would hit an economic soft patch over the summer but things would start to firm over the August/September time frame. As if on cue, numbers have started to get a little better, and this is another big number in that direction.'
LAWRENCE GLAZER, MANAGING PARTNER OF MAYFLOWER ADVISORS IN BOSTON:
'The private sector is fairly lean at this point and is positioned relatively well. In the Treasury market, you are seeing a continuation of the last couple of days, which is yields moving up. The question now is: When investors digest this data and when volume returns on Tuesday, will you see a continued reversal out of Treasuries and into equities?'
CORT GWON, DIRECTOR OF TRADING STRATEGIES AND RESEARCH, FBN SECURITIES, NEW YORK:
'It was better than expected, and the revisions were also good. I hope that means this represents the bottom, in terms of the labor market. It's a very good number; we were expecting a drop of 100,000 to 120,000. Obviously one month doesn't make a trend, but hopefully this means the next couple of months will show continued growth.'
KATHY LIEN, DIRECTOR OF CURRENCY RESEARCH, GFT, NEW YORK:
'These are very nice numbers for the labor market. Not only do we get an upside surprise in overall payrolls but we also get upward revisions and a surprise in private payrolls. This will be short-term relief to currency and equity markets by reducing stress on the Federal Reserve to add more stimulus. It means for the time being, some of the fears of weakness in the U.S. economy may be misplaced as the data shows the labor market is not as bad as feared.'
MARKET REACTION: STOCKS: U.S. stock index futures spiked higher BONDS: U.S. Treasury debt prices added to losses DOLLAR: U.S. dollar rallied against the yen and euro. Keywords: USA ECONOMY/PAYROLLS (Reporting by New York Economics and Markets Desk; +1-646 223-6300) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
STORY: TABLE:
KEY POINTS: * Nonfarm payrolls fell 54,000, the Labor Department said on Friday as temporary jobs to conduct the decennial census dropped by 114,000. * Private employment, considered a better gauge of labor market health, increased 67,000 after a revised 107,000 gain in July. In addition, the government revised payrolls for June and July to show 123,000 fewer jobs lost than previously reported.
COMMENTS: PHIL ORLANDO, CHIEF EQUITY MARKET STRATEGIST, FEDERATED INVESTORS, NEW YORK:
'This was a much better-than-expected report. Not only were the August numbers pretty good but the July numbers were also revised up, that is to say better. The only number here and I don't have the detail is the loss of manufacturing jobs in August which I can't explain. Every other indicator that we've been looking at suggested manufacturing was starting to come back, maybe there is a bit of a lag there. But I'm inclined to think that is a blip and that number comes back in the fall.
'The last fortnight, the data has started to firm. We felt given the expiration of the housing credit and the peak of the census cycle, we would hit an economic soft patch over the summer but things would start to firm over the August/September time frame. As if on cue, numbers have started to get a little better, and this is another big number in that direction.'
LAWRENCE GLAZER, MANAGING PARTNER OF MAYFLOWER ADVISORS IN BOSTON:
'The private sector is fairly lean at this point and is positioned relatively well. In the Treasury market, you are seeing a continuation of the last couple of days, which is yields moving up. The question now is: When investors digest this data and when volume returns on Tuesday, will you see a continued reversal out of Treasuries and into equities?'
CORT GWON, DIRECTOR OF TRADING STRATEGIES AND RESEARCH, FBN SECURITIES, NEW YORK:
'It was better than expected, and the revisions were also good. I hope that means this represents the bottom, in terms of the labor market. It's a very good number; we were expecting a drop of 100,000 to 120,000. Obviously one month doesn't make a trend, but hopefully this means the next couple of months will show continued growth.'
KATHY LIEN, DIRECTOR OF CURRENCY RESEARCH, GFT, NEW YORK:
'These are very nice numbers for the labor market. Not only do we get an upside surprise in overall payrolls but we also get upward revisions and a surprise in private payrolls. This will be short-term relief to currency and equity markets by reducing stress on the Federal Reserve to add more stimulus. It means for the time being, some of the fears of weakness in the U.S. economy may be misplaced as the data shows the labor market is not as bad as feared.'
MARKET REACTION: STOCKS: U.S. stock index futures spiked higher BONDS: U.S. Treasury debt prices added to losses DOLLAR: U.S. dollar rallied against the yen and euro. Keywords: USA ECONOMY/PAYROLLS (Reporting by New York Economics and Markets Desk; +1-646 223-6300) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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