MUFG strategist John Herrmann on......>

US DATA REACT: MUFG strategist John Herrmann on soft Aug +156K jobs: "as we

previewed, August typically is undercounted in the first estimate. Since the

year 1999, the BLS typically UNDER-counts Aug. payrolls by an average of

-52.277K mom."

- He adds today's jobs has "symptoms" of another "under-count" as "first,

Private payrolls gained +165K mom, very, very close to our models forecast of

+168.1K mom (and very close to consensus +170K mom)." Plus 2nd, "seasonal

adjustment factor came in very close to forecast, although the SA factors for

June-July were nudged higher." He added "third, the Aug Establishmt

Collectn-Response Rate was extremely weak, which biases lower the gain in

nonfarm payrolls. Such a downward bias to the initial payroll estimate increases

the likelihood that this payroll number is revised higher. Fourth, the weakness

in this Aug payroll report was, once again, in the public school education

sector," a sector "most at risk to be UNDER-reported in Aug and especially in an

early Sat. 12th reference wk. He urged to "NOT chase the rally" but "broad" jobs

report "tone does fit with our FLAT 2s-10s Yld Curve call."