US private payrolls rise less than expected

<p>Conflicting economic data is fuelling uncertainty over the timing of an interest rate hike.</p>

US private employers added fewer workers than forecast in August, new data released today (August 2nd) has revealed.

The ADP National Employment Report showed private payrolls increased by 190,000 last month, which was below economists' expectations for a gain of 201,000 jobs, according to Reuters. However, it was up on the 177,000 positions created in July.

The results give more credibility to a September interest rate rise from the Federal Reserve, along with the fact that the US economy grew significantly more than first estimated in the second quarter of the year.

It expanded at an annual rate of 3.7 per cent, beating an initial report of 2.3 per cent on July 30th, the country’s Commerce Department has revealed.

Poor data from China

However, the chances of an early interest rate hike have been diminished by a global stock market sell-off in the wake of poor economic data from China. 

The country's official manufacturing purchasing managers' index (PMI) came in at 49.7 in August, down from 50 in July. In addition, the final Caixin/Markit manufacturing purchasing managers' index (PMI) stood at 47.3 in August, down from 47.8 in July.

Meanwhile, a key US manufacturing index from the Institute for Supply Management (ISM) for August published this week was down to its lowest level since May 2013.

New York US Federal Reserve president William Dudley said last week that a rate rise in September "now seems less compelling" than it was in July.

"The slowdown in China could lead… to a slower global growth rate and less demand for the US economy," he said.

However, he didn't completely dismiss a September rate rise, saying the case "could become more compelling by the time of the meeting as we get additional information on how the US economy is performing".

But Fed vice-chairman Stanley Fischer told CNBC last week it was too early to decide whether the stock market rout had made a rate hike this month less compelling.

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