US NFP: US Economy Slows to 142,000 New Jobs in August, Fanning Recession Worries

Cooler number solidifies projections of at least a 25bps interest rate cut. Some are calling for a jumbo-sized 50bps slash.

• The US nonfarm payrolls report USNFP released Friday morning showed America’s employers added 142,000 new hires to the economy in August, sliding below expectations for 164,000. Still, it wasn’t as bad as the July report when analysts missed the mark by a wide margin and triggered a cascade of falling prices everywhere. The figure helped strengthen the rate cut narrative but also fanned some fears of a US recession. The unemployment rate slipped to 4.2% from 4.3%.
• Markets are already gearing up for an interest rate cut by the Federal Reserve when central bankers gather on September 18. The question on everyone’s minds is what would it be: a non-eventful 25bps, which has been priced in and baked in and can even disappoint some investors; or a bigger, jumbo-sized slash to borrowing costs of 50bps. This remains to be seen.
• Futures contracts tied to the major averages lost ground ahead of the opening bell in New York. Dow Jones futures pulled back by a modest 0.3%, followed by a 0.5% drop in S&P 500 futures. Nasdaq futures were lower by about 1%. It hasn’t been a great week for equities — the S&P 500 has been clocking out in the red for the past three trading sessions.