For the third month in a row, the U.S. has posted negative jobs growth. In August, the Bureau of Labor Statistics (BLS) reported that nonfarm payrolls fell by 54,000 jobs — the same as the revised number for July — while expectations were for around 120,000 job losses.

The private sector showed a net jobs increase of 67,000 for August, an improvement over the 44,000 private sector jobs expected. Though still at a modest growth level, private-sector jobs growth is a positive sign for the economy, and stock futures jumped as the jobs report was released.

Many analysts had been bracing for even-worse results, so the jobs loss numbers are currently seen in an even more-favorable light. We shall see if this positive sentiment can be sustained throughout the trading day. At the onset of the three-day Labor Day weekend, we shall also check trading volume levels today.

Federal government census jobs fell as expected, though those numbers are dwindling from previous months. 114,000 census jobs were officially terminated in August, a tad under what was expected. In total, 121,000 government jobs were lost in August.

The unemployment rate, as expected, ticked up from 9.5% to 9.6%. The overall job losses in the month is only one small part of this; the participation rate — the amount of unemployed people actively looking for work — appears to be growing. Though this takes a toll on the headline numbers, it too can be seen as a step in the right direction for the overall economy.

As always, Chief Market Strategist Dirk van Dijk, CFA will issue his in-depth report on the BLS numbers, sometime around mid-day. But the bottom line is this: as most people watched these numbers being released with much trepidation, the better-than-expected results have resulted in immediate market relief.
Zacks Investment Research