The non farm payrolls growth in US proved to be much lower than consensus, however the upwards revisions of the last 2 months, as well as solid wage growth and lower unemployment rate do not take September hike off the table. It’s worth to note that even without prior revisions the labor market report should still be seen as a solid one, proving that labor market slack is diminishing. Furthermore, US economy is pretty much in the full employment – seen when unemployment rate reaches 5% – exactly what Fed was expecting. Jeffrey Lacker, President of Richmond Fed, shares the opinion saying that exceptionally low rates no longer warranted by job market and US no longer requires zero interest rates.
The US stock market opened lower today, sharing the bearish sentiment seen earlier during the European trading session. DAX is losing close to 3% proving that investors still fear what will happen once Chinese stock market re-opens next week. S&P 500 was initially losing about 1%, however extended its losses during the session towards 2%. It’s worth to note that Wall Street will be closed on Monday as USA will be celebrating Labor Day.