On the August Jobs Report

142,000 is officially a miss, but probably a substantial beat over the whisper number, with markets infected by a new round of recession fears. The prior two months were revised lower. The labor force and hours worked grew to new all-time highs. The unemployment rate ticked slightly lower, and at full decimal precision the Sahm Rule remains untriggered. This is the last jobs report before the September FOMC, but there will be one more CPI report. Inflation will come in below target, and this jobs report doesn't look recessionary, so we expect the FOMC will cut rates by 25 bp, not 50 bp. The large downward payroll revision resulting from the BLS's preliminary annual benchmarking exercise still leaves more than 2 million new payrolls during the 12 months subject to revision. Payrolls have been the odd man out in labor data, with our model based on all the other data sets showing jobs growth all along at about the level payrolls will show when the benchmarking is finalized. (Please see the correction posted on the last page.)