The Dow Jones (DJIA) is set to open Friday’s trading session down by nearly 1% after a weaker-than-expected nonfarm payrolls (NFP) report and downward revisions for the prior two months.
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The U.S. added 73,000 nonfarm payrolls in July, well below the consensus estimate of 104,000. In addition, the unemployment rate was 4.2%, in line with the estimate but rising from 4.1% in June.
Rate Cut Odds Rise Following Weak Jobs Report
Also spooking the market are significant downward revisions to the May and June nonfarm payrolls. May’s figure was cut by 125,000 jobs to 19,000 and June’s figure was reduced by 133,000 jobs to 14,000. The Bureau of Labor Statistics said the revisions were “larger than normal.”
The odds of a 25-bps rate cut during the September 16-17 Federal Open Market Committee (FOMC) meeting surged following the weak jobs report. The probability now stands at 66.2% compared to 37.7% yesterday and 61.9% a week ago, according to CME’s FedWatch tool.
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