US Job Growth Disappoints, NZD and Gold Prices Rise

A surprise drop in US nonfarm payrolls has reduced expectations of a September Federal Reserve rate hike, pushing up the New Zealand dollar and gold prices.

The US economy lost 23k jobs in August, well below the expected 80k, with prior months revised down by another 103k. The unemployment rate fell to 4.1%, but this was largely due to a decrease in labour force participation rather than an improvement in employment numbers.

The weaker-than-expected data has led to a reevaluation of interest rate expectations, with markets now pricing around 11bp of tightening for September, down from 14bp previously.