Aug Nonfarm Payrolls Weaker Than Expected


S&P 500 futures advanced to record highs in the overnight trade. However, selling emerged when the August employment report came in on balance weaker than expected.

Nonfarm payrolls in August increased 235,000 when a gain of 740,000 was expected. Private payrolls were up 243,000 when up 693,000 was anticipated.

Average hourly earnings increased 0.6%, which compared to the predicted increase of 0.3%.

The unemployment rate was 5.2%, as estimated.

The 8:45 central time August PMI composite final is expected to be 55.4 and the 9:00 August Institute for Supply Management services index is anticipated to be 62.

Stock index futures are likely to recover today from the morning pressure.


The U.S. dollar index declined in response to the headline weak August nonfarm payrolls portion of the employment report. Longer term, the U.S. dollar is likely to be supported by a safe-haven flow of funds.

Euro zone retail sales fell 2.3% from a month earlier in July, following the revised 1.8% growth in June and missing market expectations a 0.1% increase.

The final reading for the euro zone’s services PMI for August was 59.0, according to data from IHS Markit. This reading is below the 59.8 registered in July and lower than the 59.7 preliminary estimate. A reading above 50 indicates an expansion an activity, while below this threshold indicates a contraction.

The IHS Markit/CIPS U.K. services PMI was revised lower to 55.0 in August, from a preliminary reading of 55.5 and was below the previous month’s 59.6.


The 30-year Treasury bond futures are lower as traders reacted to the inflationary aspects of the increase in average hourly earnings.

Traders continue to focus on when the Federal Reserve will taper its $120 billion a month in asset purchases.

I believe a tapering will be later rather than sooner, and when it is implemented it will be a dovish tapering with any reduction being small.

The 30-year Treasury bond futures are likely to at least partially recover from the morning pressure. Also, the longer term trend is higher for the 30-year Treasury bond futures as the rate of growth in the global economy slows.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now