RPT--🇺🇸❗️Cable FX Macro Weekly Note: August Non Farm Payrolls

**As seen in Risk In The Week report 08/25/23, subscribe at cablefxm.co.uk/reports

July Non Farm Payrolls increased by 187K, this came to miss the consensus for the second time this year. The two-month payroll net revision subtracted 49K jobs. While the headline could have been perceived as a soft data point, the unemployment rate surprised economists’ expectations as it printed at 3.5%, close to cycle lows. July AHE came in at 4.4% Y/y, this was higher than the median consensus forecast of 4.2%, and the participation rate remained at 62.6%, these figures showed that while the labour market is easing it remains historically tight. More recently, the BLS preliminary yearly revision revealed the U.S. labour market to be smaller than previously anticipated by 306K jobs. However, analysts noted that the figure is not enough to move the dial for the Fed. The consensus median sees the unemployment rate rising to 3.9% by year-end, the desk at CIBC pencils a 4.1% while Goldman Sachs expects it to remain unchanged from current levels at 3.5%. Recently, Fed’s Harker said that an uptick in the unemployment rate could be a little north of 4.0% and this would be considered a ‘natural rate.’ The desk at CIBC sees “more of the same” in August as they expect an uncomfortably slow pace of labour market softening, they pencil the headline number at 175K and the unemployment rate rising slightly to 3.6%. CIBC said that this pace of slowdown won’t be enough for the Fed and expects another rate hike in September.