Live Markets-Wall Street futures lose some steam after jobs growth surprise

Brian Jacobsen, chief economic strategist at Annex Wealth Management, said in an emailed comment after the numbers that the drop in July’s numbers was "an illusion."

"That’s the problem with trying to trade the headlines. Data get revised. The drop in local education was a seasonal adjustment illusion. The index for aggregate hours and aggregate earnings both advanced nicely," he said. "The labor force participation rate improved, but it’s hard to believe the labor force increased by 683,000 in August. The BLS has some soul searching to do when it comes to seasonal adjustments."

However, Jacobsen noted that the number of people who have been unemployed for 27 weeks or more increased by 159,000.

"A 'no-hire, no-fire' situation is OK for those with jobs, but tough for those without," the economist said.

Wall Street equity futures added to losses on Friday after the closely watched nonfarm payrolls report showed that the U.S. economy added far more jobs than expected in August, leading traders to price in a higher probability that the Federal Reserve could raise rates this month.

S&P 500 futures were down 0.25%, while Nasdaq 100 futures were near flat. Europe’s STOXX 600 edged down about 0.09%.

The U.S. Labor Department’s Bureau of Labor Statistics reported 162,000 jobs growth in August, above consensus expectations for 56,000 from economists polled by Reuters. The number compared with July’s 21,000 growth, which was revised from a 23,000 loss, and June’s revision up to 31,000 from the previously reported 20,000 growth.

Short-term interest-rate futures were implying about a 65% chance of an increase in the U.S. policy rate at the Federal Reserve’s September 15 to 16 meeting, up from about 55% before the report. It showed employers had added almost three times as many jobs last month as economists had anticipated.