- Millan Mulraine, deputy chief US macro strategist at TS Securities
US private sector added fewer jobs than expected in August, undermining expectations that the Fed will hike interest rates in September. According to the ADP National Employment Report, American companies employed 190,000 workers in the reported month, missing economists' expectations for 200,000 new jobs. The report was published ahead of the government's more comprehensive employment data due on Friday. Economists predict that non-farm payrolls rose by 220,000 jobs in August following the 215,000 gain in July. The unemployment rate is predicted to tick down to 5.2% from the 5.3% in July. The data will come less than two weeks before the Fed's crucial policy meeting on September 16-17. The chances of an interest rate increase this month have been diminished by a global stock market rout due to poor economic data from China.
Separately, the Labor Department said nonfarm productivity rose at its strongest pace in more than a year in the second quarter, keeping wage inflation weak for now. The government revised productivity to show it surging at a 3.3% annual rate, the quickest since the fourth quarter of 2013, instead of the 1.3% pace reported last month.
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