Friday, August 7, 2020

Better-than-expected employment numbers from the U.S. Bureau of Labor Statistics (BLS) helped move pre-markets a little bit more in a positive direction: 1.763 million new jobs in the month of July beat expectations of 1.68 million, though down from a slightly downwardly revised 4.79 million reported for June. The Unemployment Rate fell to 10.2%, beneath the anticipated 10.6% and 90 basis points lower, month over month.

The private sector made up 1.462 million of this total, with government jobs — both state and local, including back-to-school workers in many (not all) regions of the country — making up the 301K difference. Both Leisure & Hospitality and Food & Drinking Establishments reported gigantic monthly figures, 592K and 502K, respectively. Temporary layoffs accounted for 1.3 million of this 1.763 million jobs number, indicating the amount of hire-backs was the major catalyst of this relatively strong report.

Average Hourly Earnings came in at +0.2%, well above the -0.5% expected and the -1.2% reported for June. The Labor Force Participation rate dipped to 61.4%, which over the pandemic months has seen a couple percentage points — roughly 5 million people — have left the labor force outright. Currently, the U.S. has a workforce around 159 million people.

Revisions for the previous two months were also strong by comparison — even though June’s headline dropped a smidgeon, May job totals rose from 2.699 million originally reported to 2.725 million now. Still, we have a lot of hard work ahead for the domestic labor market, after having lost 22 million jobs total over the months of March and April combined.

Markets pulled to around even just minutes before the jobs report came out, after beginning the morning moderately in the red. We’ve sunk back a bit lower, basically splitting the difference between how low pre-market activity started the day and where we were right after the BLS numbers were announced.

After all, though we did see positive developments compared with expectations, much of the low-hanging fruit has already been picked. Making up the remainder of our previously robust labor market is still a ways down the road.

Mark Vickery
Senior Editor

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