Job growth cooled in August, with nonfarm payrolls adding just 142,000 even as the unemployment rate fell to 6.1 percent, according to the Labor Department. The fall in the headline rate came as labor-force participation fell, declining to 62.8 percent, or 64,000 workers, tying the 2014 bottom and remaining at the lowest level since 1978.
Economists expected payroll growth of 225,000 in August following July's upwardly revised 212,000. The unemployment rate was forecast to drop to 6.1 percent from 6.2 percent.
August's number are a notoriously volatile set, with 2013's initially reported 169,000 ultimately revised up to 238,000. In 2011, the Bureau of Labor Statistics initially said net job creation was zero, only to push that figure up to 104,000 by the time all was said and done.
Markets actually liked Friday's report, pushing stock futures higher as traders likely gained confidence that monetary policy would remain loose for an extended period of time. Bond yields declined in lockstep, with the 10-year Treasury note yield falling to 2.42 percent.
"The report is a remarkable disappointment as a headline number, especially after receiving such promising macro data over the summer," said Todd M. Schoenberger, president of J. Streicher Asset Management. "Oddly enough, though, this flat figure may still bode well for investors' portfolios because it should force the Fed to take a breather with its 'increase-in-interest-rate' chant, which will push equity valuations higher. The data should help continue the markets' upward trajectory today, and throughout the rest of the quarter."