US job growth slows sharply

Nonfarm payrolls increased by just 29,000, well below expectations of 90,000. The previous month’s gain of 162,000 was revised down to 133,000. Private sector employment also missed expectations, rising by 46,000 versus a forecast of 81,000, while the previous figure was revised down from 127,000 to 89,000.

The unemployment rate rose to 4.2%, above expectations of 4.1%, while the labor force participation rate increased to 61.8%, exceeding the 61.6% forecast. Average hourly earnings rose just 0.1% month-on-month, below the 0.3% estimate. Annual wage growth also came in below expectations at 3%, compared with a forecast of 3.1%. The weakening in employment and wage growth provides a new signal for markets to monitor as the Fed assesses the outlook for monetary policy.