August is rolling along and the question of a September interest hike still looms ahead. The numbers continue to point to a Fed hike as a real possibility.
The Labor Department on Friday reported that U.S. jobs were lower than expected in July falling only slightly and the unemployment rate remained the same at 5.3 per cent for the last two months. 215,000 jobs were added last month.
The same report showed non-farm payrolls largely in line with market expectations for July with gains of more than 215K jobs just missing the 225K figured anticipated by economists.
The job market data is the most scrutinized report by the Fed and is the key determinant in its decision to raise the federal funds rate for the first time in nine years. At its last meeting several weeks ago, the central bank's policy committee said the labor market continued to improve with solid job gains.
These gains, although not outstanding, provided additional reason for the Fed to raise interest rates in September.
Hike Expected in September
According to BTIG strategist Dan Greenhaus, "We have nearly all year expected a rate increase in September and we see no reason to alter that view with the release of today's report. “
Economist Paul Ashworth of Capital Economics agreed and said "It is easily enough to keep the Fed on course for a September liftoff."
The strong jobs report caused the EURUSD pair to plummet, giving up most of its gains and ending the day at 1.0962, barely changed from $1.0972.
Stock markets reacted accordingly, bringing U.S. stocks down slightly lower on Friday, with the major averages ending the week about 1.5 percent lower.