June Payrolls Miss But Unemployment Rate Declines, Pulling Back From “Sahm Rule Recession” Trigger

There was some good news and some bad news in today’s jobs report – first the bad news: the August payrolls number came in at 142K, a small miss to estimates of a 165K print, if a big jump from the downward revised July print of 89K. The good news, however, is that while the payrolls print missed, the unemployment rate actually dipped from that critical “Sahm’s Rule trigger” level of 4.3%, to 4.2%, in line with expectations. So bottom line: the number could be better, but it is certainly not bad enough to trigger a 50bps rate cut in two weeks.

Here are the details.

As noted above, in August, the US added 142K jobs…

… which was slightly below estimates of a 165K print, but hardly some crazy outlier as in previous months.

Then again, as has become the norm, both previous months were revised sharply lower, so once again expect the August print to suffer the same fate. Specifically, the BLS said that the payroll print for June was revised down by 61,000, from +179,000 to +118,000, and the change for July was revised down by 25,000, from +114,000 to +89,000. With these revisions, employment in June and July combined is 86,000 lower than previously reported It also means that 4 consecutive job prints have been revised lower, and 6 of the past 7.

Developing.