The all-important August jobs report was released this morning with slightly disappointing results. The headline employment figure came in at 130,000, which was 30,000 shy of the 160,000 expected. On the brighter side, the unemployment rate remained near its 50-year low of 3.7% and the participation rate increased slightly to 63.2% (previously 63%). Also included in the report is the closely followed wage growth measurement which cooled from its high of 3.4% in February to 3.2%.

Though we never like to see a miss, in the face of trade tensions and weakening manufacturing data, this is a solid report. For the three months ending in August the average employment growth was 156,000, compared to the average of 190,000 during the expansion over the previous eight years. This softening indicates that the economy is slowing slightly but is still on solid footing. The CCM Economic Strength Index is now indicating that current GDP has returned to its “new normal”, of around 2%-2.5%.

The weaker than expected August jobs report coupled with the disappointing manufacturing data released earlier this week should ensure a modest rate cut by the Fed at the Sept. 17-18 policy meeting. August’s miss justifies the 90% probability of a 0.25% rate cut, but should not be enough to increase the 10% probably of more than 0.25%.