US Jobs Data Misses Forecast

According to U.S. government data, the economy added 151,000 jobs in August, with the unemployment rate coming in at 4.9 percent. Average hourly earnings posted a 0.1% reading.

The jobs report was disappointing across the board with the headline number coming in below the 180,000 estimate. The unemployment rate was unchanged, but higher than the forecast. Average hourly earnings came in below the forecast and the previous read.

The CME Group FedWatch probability indicator for a September rate hike dropped on the news. Traders tracked by the CME are now forecasting about an 18 percent chance of a September rate hike. This is where it was last week before Fed Chair Janet Yellen’s speech at Jackson Hole, Wyoming. Earlier today, the chances of a rate hike this month stood at 27 percent.

Before the jobs report, traders estimated a 57.6 percent chance of a December rate hike, but that prediction was erased, dropping as low as 51.2 percent before settling around 54.5 percent.

U.S. stock indices responded positively to the news and are expected to open higher. The Dow is called about 50 points higher, the NASDAQ composite and the S&P 500 are expected to add 20 points and 6.75 points respectively.

The dollar weakened on Friday as the Greenback lost its luster as a favored investment following the disappointing jobs report and the drop in Treasury yields.

Gold prices rose to their highest level since August 26 after the release of the U.S. Non-Farm Payrolls data. The drop in the U.S. Dollar helped drive up demand for the dollar-denominated gold market.

The USD/CAD plunged after the jobs report, dropping as much as 0.68%. The GBP/USD spiked to 1.3343, up 0.57%. The posted a volatile range, rallying to 1.1252 before pulling back to 1.1212, up 0.14%.