4 September 2026
If you are covering the latest US jobs data, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Today’s US nonfarm payrolls report was an important test of whether July’s surprise decline in employment was the beginning of something more troubling, but with 162,000 jobs added in August, the unemployment rate holding steady at 4.1%, and July’s figure revised up to an increase of 21,000, it seems there was no need to worry.
“The figures should offer some reassurance to Federal Reserve policymakers ahead of the meeting later this month, as a swift return to job growth supports the view that the labour market has managed to remain broadly stable despite the loss of momentum seen in recent months. Key drivers of this uplift were increases in food services and drinking places, as well as in local government education. Meanwhile, the information industry saw a decline.
“While the number of jobs added has surprised on the upside, the problem is not yet solved. Inflation remains hot enough to keep the Fed on alert, but, equally, policymakers will be wary of taking any action that risks putting further strain on what has been a rocky labour market. With Kevin Warsh and other FOMC members seemingly at odds over the outlook, today’s figures might not quite settle the debate over the next move for interest rates.
“This leaves the Fed facing a difficult balancing act. While the jobs market appears resilient enough to ease immediate fears of a material slowdown, it has not been consistently strong enough to remove concerns about the underlying direction of the economy. Against that background, a split in voting at the Fed meeting in just under two weeks would come as little surprise.
“For markets, the message is equally mixed. Investors therefore need to prepare for a range of possible outcomes, and bond markets may once again rethink their assumptions on the timing and direction of the Fed’s next move. This only adds to the uncertainty that has already been building, and which appears to be becoming a hallmark of Warsh’s tenure.”
