Highlights
August non-farm payrolls rose an in-trend 169,000 in August, a bit lower than expected but more than offset by a net 44,000 upward revision to July and June.

Note there was no effect from Hurricane Katrina, which hit Florida and later the Gulf Coast following the Labor Department's mid-month survey period.

Services, up 156,000, were as usual the center of gains: professional & business services up 29,000, trade & transportation up 19,000, finance up 15,000, government up 15,000, retail trade up 12,000. Jobs at motor vehicle & parts dealers, which jumped 9,000 in July as incentives drove customers into showrooms, fell back 2,000.

Goods producing jobs rose what for this category is a solid 13,000. Construction jumped 25,000 after a soft showing in July, while natural resources and mining rose 2,000. But manufacturing jobs contracted for a third straight month, down 14,000 and extending their secular descent.

Average hourly earnings rose only 0.1% in the month to $16.16 following July's 0.4% spike that raised talk at the time of wage pressures. Not pointing to such pressures were average weekly hours, which were unchanged for a fourth month at 33.7 hours.

Household data likewise showed solid strength with the unemployment rate dipping one tenth to 4.9%, the best rate in four years and were it not for Katrina would be a big headline in the nation's newspapers. The labor force participation rate rose one tenth to a solid 66.2% as did the employment-to-population ratio at 62.9%.

The bond market edged lower and the dollar higher after choppy initial reaction to the results, which because of their strength will limit building talk of a Federal Reserve rate-hike pause.

But the August employment report carries less importance in the wake of Katrina, which in the affected language of academics is the first exogenous shock to hit the economy since 9/11. What's important to the markets is what's unfolding right now: the effect of higher gas prices, the dislocation to national and global output, the damage to the nation's energy and transportation infrastructure, and the Fed's monetary response. The political cost to the U.S. administration in the face of human suffering and loss of life could emerge later as a significant factor for the markets. At least going into the shock, the August employment indicates, thankfully, that economic momentum was steady and strong.

2005 Release Schedule

Released On: 1/7 2/4 3/4 4/1 5/6 6/3 7/8 8/5 9/2 10/7 11/4 12/2 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov