Here’s when the Street expects the Fed to hike rates

Some analysts continue to expect the Fed to raise rates this month, including economist Jan Hatzius at Goldman Sachs who said the August job gains are “just enough” to be convincing.

Other European and U.S. markets also made some ground after official statistics for August showed 151,000 net new jobs were created in America – with the unemployment rate remaining at 4.9%.

The Labor Department will release its closely watched employment report on Friday and readings in line with expectations would reinforce views that the economy has regained speed after nearly stalling in the first half of the year.

Traders trimmed the probability of a Fed rate hike this month to 21 percent from the 24-percent chance on Thursday, according to CME Group’s FedWatch program. Rate hike probabilities for both the September and December meetings have risen after remarks last Friday by Fed Chair Janet Yellen that the case for raising rates had strengthened in recent months.

The Fed held its benchmark short-term rate at a record low near zero for seven years to support the economy after the financial crisis erupted in 2008.

The dollar rose against a basket of currencies, while prices for US government bonds fell.

Republican presidential nominee Donald Trump’s campaign team said the jobs numbers were a sign of a disappointing economic performance tied to what a senior campaign adviser called “Clinton globalist policies”.

Even though substantial labor market slack has been reduced, millions of Americans remain unemployed, a source of frustration that could weigh on the minds of some voters in the November presidential election.

Ohio’s unemployment rate fell to 4.8 percent in July, down from 5 percent in June, as employers statewide added 11,400 jobs over the month. Over the last several years, the government’s initial August payrolls estimates have been weak only to be subsequently revised higher.

If a relatively tepid pace of job growth keeps the Fed on the sidelines for longer, the continuation of ultra-low rates could sustain the economy’s expansion, some analysts suggested.

The smaller-than-expected rise in payrolls also likely reflects difficulties adjusting the data for seasonal fluctuations related to school calendars. “This should put to rest the conversation on September”, said Tom Porcelli, chief United States economist at RBC Capital Markets in NY.

The timing of the next rate hike could also be determined by wage growth. The S&P 500 .SPX was up 3.33 points, or 0.15 percent, at 2,174.19. Average hourly earnings for August rose by 0.1%, slightly below the 0.2%, expectation, but year-on-year earnings were pushed down from growth of 2.7% to 2.4%. But almost 58 percent forecast at least one increase will take place by the end of the year.

The post-Brexit surprise boosted the pound as it could prompt the Bank of England to rethink the need to cut interest rates again if other surveys confirm the trend.

Last month, manufacturing sector employment fell 14,000 after rising for two straight months.

But with resistance among other key Fed policymakers to a near-term rate hike strong, a September rate hike was already seen as unlikely before the jobs report. Temporary help firms shed 3,100 positions.

Michael Gapen, chief USA economist with Barclay’s, told ABC News that he’s standing by his September hike call, but admitted “the optics of this report are less than we would have liked”.