Excellent Employment

August’s employment report is best described as Goldilocks. Most importantly, 786,000 persons entered the labor force, pushing the labor force participation rate from 62.1% to 62.4%. While some found work, others didn’t. As a result, the unemployment rate rose from 3.5% to 3.7%. Better yet for the Fed, M-o-M average hourly earnings declined from 0.5% to 0.3%. This keeps a 75bps hike on the table, but marginally reduces its likelihood.