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August Payrolls Beat As Wage Growth Comes In Scorching Hot

While many were expecting a potential downside surprise due to the 'residual seasonality' of August payrolls (discussed previously), moments ago the BLS reported that after a weaker than expected July (which was revised lower from 170K to 153K), August payrolls came in strong than expected at 201K, above the 191K consensus estimate.

But as we noted in our preview, while the payrolls number is generally ignored by the market with the unemployment rate near all time lows, and which in August was 3.9%, just above the 3.8% expected...

... what prompted the spike in the dollar, and the lower  kneejerk response in risk assets, was the average hourly earnings print, which came in scorching hot, relatively speaking, rising 0.4% last month, double the 0.2% expected, and 2.9% on a Y/Y basis, the highest going back to 2009.

As a reminder, it was the "hot" January hourly earnings print that according to many prompted the sharp selloff that Friday that cascaded into the VIXtermination event the following week. Is the market about to have another similar ugly reaction now that wage inflation, and the Phillips curve, appears to finally

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