US job growth slows whilst hourly earnings see sharp rise

In our weekly Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.

Job growth in the United States slowed through the month of August but hourly earnings saw a sharp rise, almost double the expected rate.

Recording employment gains of 235,000 jobs, the month missed estimated projections of 750,000 by almost 70% with the hospitality and leisure industries virtually grinding to a halt as the Delta variant of COVID-19 tightens its hold on the country. However, whilst growth slowed, average hourly earnings saw a steep rise in comparison. Roughly doubling compared to previous estimates, hourly earnings increased by 0.6% across the month.

The jump in hourly earnings appeared to spur inflation fears and an increase in the benchmark 10-year U.S. Treasury note yield on Friday morning, leaving it modestly higher for the week.

Eurozone inflation accelerated more than forecast to 3% in August—up from 2.2% in July and well above the ECB's 2% target. Higher energy, food, and industrial goods prices drove the increase, according to the EU's statistics agency.

News of Prime Minister Yoshihide Suga’s resignation contributed to a strong rally in Japanese equities, removing some political uncertainty and raising expectations of increased economic stimulus. Gains were underpinned by Japan’s accelerating COVID-19 vaccination drive. The Nikkei 225 Index soared 5.38%, while the broader TOPIX Index rose 4.49%, reaching a 30-year high.