August Payrolls Crush Expectations, Rate Hike Odds Soar
The August nonfarm payrolls beat expectations by a wide margin, coming in at 162,000 jobs added. This figure is nearly three times the upper limit of the 'ideal range' set by Fed official Waller.
The strong employment data has sent interest rates soaring, with the probability of a rate hike in September rising to around 60% from 50% before the data was released. The cumulative rate hike expected by year-end is now about 38 basis points.
The stock market reacted negatively to the news, with the Dow falling 0.51%, the S&P 500 dropping 0.38%, and the Nasdaq falling 0.29%. However, the Philadelphia Semiconductor Index surged 3% during this period.
Gold prices plummeted by over 2% last Friday to $4,364.99, while Bitcoin fell below the $80,000 mark. The rise in oil prices has also put pressure on gold prices, as Brent crude broke through $97 per barrel.