Episode summary
Instant Reaction: US Adds 162,000 Jobs, Topping All Estimates | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 27 min · Hosts: Tom Keene, Damian Sassower, Carol Massar, Tim Stenovec · Guests: Claudia Sahm, Amy Wu Silverman, Kristina Campmany
Summary
August payrolls rose by 162,000, far above expectations, and the unemployment rate held at 4.1%, prompting an immediate selloff in equities and a jump in Treasury yields. The host emphasized that the two-month revision also added 55,000 jobs, making the labor market look sturdier than it had after the prior month’s weakness.
The reaction on the show was that the report complicates the Fed’s next move rather than making it easier. One analyst said the labor market is still not flashing the kind of downside risk that would force the Fed’s hand, while another argued the report fits better with officials who may be open to hiking in September. At the same time, the discussion kept returning to inflation and the idea that labor data alone may not settle the decision.
Market participants focused on the bond move and on what the report means for volatility. One guest said the options market had been pricing a fairly tame reaction in payrolls, while another pointed to heavy rotation within equities, not an exodus from stocks. The broader message was that the labor market remains solid enough to keep the Fed cautious and investors on edge heading into CPI and the September FOMC.
Key takeaways
- The host said August nonfarm payrolls rose 162,000, with a two-month revision adding 55,000 jobs.
- An analyst said the unemployment rate at 4.1% is the Fed’s more important labor-market signal than the monthly payroll swings.
- One guest argued the report supports officials who may want to hike in September because downside labor risks are limited.
- Another guest said options markets had priced payrolls as a near "nothing burger," even though volatility could still rise into CPI and the FOMC.
- A portfolio manager said bond portfolios should stay shorter duration because supply, fiscal concerns, and inflation remain a headwind.
Notable quotes
“Non-farm payrolls rising therefore month on month by 162,000. That is a well three times the estimate 55,000”
“I mean, I think you know that going to this trying to smooth this out, not get too hung up on a monthto-month”
“the one that they still look a lot to the unemployment rate and wow it I mean that thing is is really stable has been low and stable”
“the at the money break evens on NFP were basically average. So, you know, when you kind of look historically at these break evens, and it was sort of pricing a nothing burger”
How the episode opens
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From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- jobs report
- unemployment rate
- labor market momentum
- bond market reaction
- derivatives strategy
Companies and tickers mentioned
- RY
- IVZ
- New Century Advisors
- Royal Bank of Canada
- Invesco
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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