Nonfarm payrolls: positives and negatives - Nomura

Analysts at Nomura offered the positives and negatives for nonfarm payrolls.

Key Quotes:

Positives

Nonfarm payrolls (+209k) and private payrolls (+205k) both exceeded expectations. 

Manufacturing employment showed a decent increase of 16k after an upwardly revised 12k gain in the previous month. 

Food service and drinking places added 53k jobs, marking the highest increase since October 2015. 

Average hourly earnings increased strongly by 0.3% (0.343%) m-o-m in July, keeping its y-o-y growth at 2.5%. However, considering the possibility of the impact from a calendar quirk, it is uncertain for this metric to continue to increase at the pace of 0.3% m-o-m or higher in coming months. 

The labor force participation rate inched up to 62.9% from 62.8%, suggesting continued reduction in labor market slack. 

Negatives 

Average weekly hours were unchanged at 34.5 hours. 

Retail employment, which has been affected by a growing online shopping barely increased by 1k, but the prior two months were revised lower by 9k in total. 

The underemployment rate (U6) was unchanged at 8.6%. 

The unemployment rate for those with less than a high school diploma increased 0.5pp to 6.9%."