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Kjetil Olsen, analyst at Nordea Markets, notes that the US Nonfarm payrolls increased by 164k in July as expected, but the two last months were revised down by 41k.

Key Quotes

“Nonfarm payrolls increased by 164k in July following a strong but revised down June at 193k (revised down from 224k). The 6-month average decreased from 165k to 140k, while the 12-month average was rather unchanged at 187k. Employment growth is still above the numbers needed to bring unemployment down over time and indicates that the economy is still growing moderately above trend. While we see slowing in employment growth, the slowdown is so far more comparable to what happened during the mid-cycle policy adjustments in ’95 and ’98 than what happened during the full rate cutting cycles in the 2001 and 2007 episodes.”

“The U3 unemployment rate was stable at 3.7 % while the broader U6 unemployment rate decreased 0.2 % point to 7.0%.”

“Wage growth picked up. This month wage growth grew by 0.3% m/m slightly above expectations (0.2% m/m), with y/y rate up from 3.1% to 3.2%.”

“While today’s data was ok, they confirm slowing growth in the US economy and will by no means take support away for the expectations of further easing from the Fed as early as the next rate meeting. Market reactions were muted.”