In August 2025, the US reported Non-Farm Payrolls rising by 22,000 compared to the expected 75,000. Private Payrolls increased by 38,000, lower than the anticipated 75,000, while manufacturing saw a decline of 12,000 jobs against a forecast of minus 5,000. Government Payrolls reduced by 16,000 from the prior decrease of 10,000. The unemployment rate held at 4.3%, consistent with expectations but slightly up from 4.2% the previous month.<\/p>\n
Average earnings grew by 0.3% month-on-month, aligning with expectations. Year-on-year, they increased by 3.7%, as predicted, but decreased from 3.9% prior. Average weekly working hours were recorded at 34.2, slightly less than the expected 34.3 hours. The labour force participation rate dipped to 62.2%, and underemployment rose to 8.1% from 7.7%.<\/p>\n
The US dollar weakened, with USD\/JPY down, influencing gold prices as markets expected more Federal Reserve rate cuts. Market expectations for a September rate cut reached 100%, with a 3% probability of a 50 basis point cut. The subsequent October meeting saw an 80% chance of a rate cut, rising from 60%. The three-month job creation average was 29,000, raising concerns about economic slowdown or potential recession.<\/p>\n
The August jobs report was a significant miss, with only 22,000 jobs created against an expectation of 75,000. This weakness is a clear signal to position for imminent Federal Reserve rate cuts. We should be looking at derivatives that profit from lower interest rates, such as buying SOFR futures, as the market is now fully pricing in a September cut.<\/p>\n
The slowdown we’re seeing has historical parallels. A three-month job creation average of just 29,000 is reminiscent of the periods in mid-to-late 2007, just before the economy tipped into a major recession. During that time, the Fed responded with aggressive rate cuts, which is what the market is now anticipating with 130 basis points of easing priced in for the next year.<\/p>\n
This data immediately weakens the US dollar, as lower interest rates make the currency less attractive. We have seen the dollar fall across the board, and this trend is likely to continue in the coming weeks. Derivative strategies should focus on shorting the dollar, possibly using futures contracts or buying put options on the currency.<\/p>\n
The stock market is caught between the bad news of a slowing economy and the good news of expected Fed stimulus. This uncertainty typically leads to higher volatility, a scenario we saw in late 2022 when the CBOE Volatility Index (VIX) repeatedly spiked above 30 on recession fears. We should consider using options on major indices to trade this expected rise in price swings.<\/p>\n
With falling rates and a weaker dollar, gold becomes a prime asset. It\u2019s already pushing near record highs, a classic reaction to this type of economic news. We should use futures or call options to maintain or add to long gold positions, as this environment provides a strong tailwind for the metal.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" August 2025 jobs data disappoints, signaling economic slowdown; markets fully price in September Federal Reserve rate cut.<\/p>\n","protected":false},"author":62,"featured_media":17027,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-30287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30287","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=30287"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30287\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17027"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=30287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=30287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=30287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}