Jobs continued to be added to the US economy in August, but at a slower rate than expected and, most disappointingly, downward revisions were made to the previous two months.
Markets initially reacted badly to the data as the dollar sank and bond yields fell. But as Wall Street stock indexes began to trade, the mood had changed and equity markets opened higher.
By the time US purchasing managers reported stronger than expected growth in manufacturing activity, the dollar was back in positive territory and some were even explaining the jobs data away as a seasonal blip.
The Bureau of Labor Statistics reported 156,000 jobs were created in the US during August, underperforming expectations of about 180,000.
Job gains were reported in manufacturing, construction, profession and technical services and health care.
However, revisions were made to the previous two months. June's non-farm payrolls was reduced to 210,000 from the original 231,000, while July's was revised down to 189,000 from 209,000 – a combined 41,000 fewer jobs created than originally reported.
There were a number of below-par elements to the report, not least wage growth which rose just 0.1% month on month, after rising by 0.3% in July.
Annual average wage growth remained stuck at July’s level of 2.5% – missing expectations of a rise to 2.6%.
"It wasn't the best jobs report overall, but for the Fed, it's the weaker wage growth that will be most frustrating," said James Smith at ING.
He added: "It's a slow-moving ship, and a lack of a near-term inflation turnaround might see some Fed members downgrade their forecasts for rate hikes."
There was disappointing news too in the rate of unemployment, which rose in August to 4.4% from 4.3% in July. The jobless rate has been either 4.4% or 4.3% since April.
Hurricane Harvey was said to have had "no discernible effect" on the data for August as much of the data was collected before the storm.
Purchasing managers surveyed by the Institute for Supply Management (ISM) provided some much-needed cheer to counter the gloom of the jobs report, however.
Business activity in the manufacturing sector grew at a faster pace in August than in the previous month, pushing the ISM Manufacturing index up to 58.8 from 56.3 in July.
Investors appeared sanguine about the jobs data, with some putting August’s decline down to seasonal factors.
"Our initial take here is that the August seasonal problem in the payroll numbers, which seemed to be fading, has struck again," said Ian Shepherdson at Pantheon Macroeconomics.
The dollar fell by as much as 0.5% following the report, but soon began to recover its poise, and after the ISM report it climbed back into positive territory. By mid-morning in New York, the dollar index was up 0.2% at 92.81.
Stocks got off to stronger start, with the Dow climbing 0.3% and the S&P 500 up 0.2%.