US unemployment rate rose and wage growth slowed in August, causing the US dollar to plummet and US stock futures to rise.

On Friday, the US released its non-farm payroll report for August.

The report shows that the number of non-farm jobs in the US in August was slightly better than expected, while the unemployment rate surged significantly and the data for June and July were revised downward.

Unemployment rate reaches one-and-a-half-year high

In August, the seasonally adjusted non-farm employment in the US increased by 187,000, surpassing the expected 170,000 and the previous value of 187,000.

The US unemployment rate in August was 3.8%, higher than the expected 3.50% and the previous value of 3.50%.

The US average hourly wage growth rate in August was 0.2%, lower than the expected 0.30% and the previous value of 0.40%.

The unemployment rate in August rose by 0.3 percentage points to 3.8%, with an increase of 514,000 unemployed people, reaching a total of 6.4 million. These two indicators are almost unchanged from a year ago when the unemployment rate was 3.7% and the number of unemployed people was 6 million.

Data from the US Bureau of Labor Statistics shows that the truck transportation industry lost 37,000 jobs, reflecting business closures.

The number of non-farm jobs added in June was revised downward from 185,000 to 80,000, and the number for July was revised downward from 187,000 to 157,000. After the revisions, the total number of non-farm jobs added in June and July was 110,000 lower than previously reported.

Employment in the healthcare, leisure and hospitality, social assistance, and construction industries continued to rise, while employment in the transportation and warehousing industry decreased.

Among the major labor groups, the unemployment rate for adult men was 3.7%, for white individuals was 3.4%, and for Asian individuals was 3.1%, all showing an increase in August. The unemployment rates for adult women (3.2%), teenagers (12.2%), black individuals (5.3%), and Hispanic individuals (4.9%) remained almost unchanged in August.

How to interpret the data?

For the Federal Reserve, the labor force participation rate is good news, as it unexpectedly increased to 62.8%, reaching the highest level since the COVID-19 outbreak in February 2020.

This is also partly why the unemployment rate rose.

The slightly lower wage data than expected also indicates that the Federal Reserve has more room to breathe.

Dan Suzuki, Deputy Chief Investment Officer at Richard Bernstein Advisors: This is a market-friendly report. Looking at the overall data, what you see is a relaxed labor market, but the economic growth is still quite healthy. This is exactly what the Federal Reserve wants to see.

US dollar falls, US stocks rise

After the data was released, the futures market fully reflected the expectation of a 25 basis point rate cut by the Federal Reserve, moving it forward from June next year to May.

According to CME's "FedWatch": The probability of the Federal Reserve keeping interest rates unchanged at 5.25%-5.50% in September is 93.0%, and the probability of a 25 basis point rate hike to the 5.50%-5.75% range is 7.0%. The short-term decline of the US Dollar Index (DXY) has expanded to 20 points, reaching 103.44.

US stock index futures have risen, with Nasdaq futures and S&P 500 index futures up more than 0.6%.

The degree of inversion in the yield curve of US 2-year and 10-year Treasury bonds has narrowed, currently inverted by 70.20 basis points.