Friday, September 3, 2021
August nonfarm payrolls, as reported by the U.S. Bureau of Labor Statistics (BLS), disappointed analyst estimates this morning, bringing in only 235K new jobs last month. This was well off the expected 720K and several rungs down the 1.053 million upwardly revised for July. The Unemployment Rate, on the other hand, dropped 20 basis points as expected, to 5.2% — a new post-Covid low.
This big drop from labor force expectations can be understood by checking the Leisure/Hospitality numbers. This industry has been the engine driving employment forward, averaging a gigantic 350K new positions filled per month over the past six months. This segment brought in no new jobs for August. Fears of the Delta variant, as well as seasonal summer employment winding down, are likely culprits for the drop.
For 2021 so far, encompassing the Great Reopening which was to bring our economy fully back from pandemic levels, we have averaged 586K new jobs per month. And with the July tally changed from 943K to 1.053 million — a 110K upward revision — as well as a +24K increase in June nonfarm payrolls, to 962K, bring our job gains totals over this period to 369K. This is still half of projections, but not suggestive of any kind of dire fall-off in the labor market.
Professional/Business Services gained +74K last month, followed by Transportation/Warehousing +53K and Manufacturing +37K. The Retail space, which had finally gotten back on its feet this summer with in-store traffic, fell -29K last month. In all, the U.S. has gained +17 million jobs since April 2020, which represents the first month back from the pandemic fallout. That’s a lot of hires; some perspective may be in order here.
Also, while Average Hourly Earnings grew a notable +0.6% in August, and +4.3% year over year, Labor Force Participation remained stubbornly in-range at 61.7%. It would seem even higher wages are not moving the needle on the amount of capable workers re-entering the labor force. That said, a 5.2% unemployment rate, considering how far we’ve come over the past year and a half, is nothing to sneeze at.
Pre-markets traded in the red ahead of the opening bell, in a week that looks mixed to mildly down overall. The disappointing BLS jobs headline does not have much to do with this; bumping up against new record closing highs over the past couple weeks on the S&P 500 and the Nasdaq, investors have grown cautious. Fewer catalysts out of earnings season, and approaching the more historically challenging autumn months, likely have as much to do with this trepidation as the soft labor force numbers this morning did.
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Unemployment Rate 5.2% as Jobs Numbers Disappoint
Friday, September 3, 2021
August nonfarm payrolls, as reported by the U.S. Bureau of Labor Statistics (BLS), disappointed analyst estimates this morning, bringing in only 235K new jobs last month. This was well off the expected 720K and several rungs down the 1.053 million upwardly revised for July. The Unemployment Rate, on the other hand, dropped 20 basis points as expected, to 5.2% — a new post-Covid low.
This big drop from labor force expectations can be understood by checking the Leisure/Hospitality numbers. This industry has been the engine driving employment forward, averaging a gigantic 350K new positions filled per month over the past six months. This segment brought in no new jobs for August. Fears of the Delta variant, as well as seasonal summer employment winding down, are likely culprits for the drop.
For 2021 so far, encompassing the Great Reopening which was to bring our economy fully back from pandemic levels, we have averaged 586K new jobs per month. And with the July tally changed from 943K to 1.053 million — a 110K upward revision — as well as a +24K increase in June nonfarm payrolls, to 962K, bring our job gains totals over this period to 369K. This is still half of projections, but not suggestive of any kind of dire fall-off in the labor market.
Professional/Business Services gained +74K last month, followed by Transportation/Warehousing +53K and Manufacturing +37K. The Retail space, which had finally gotten back on its feet this summer with in-store traffic, fell -29K last month. In all, the U.S. has gained +17 million jobs since April 2020, which represents the first month back from the pandemic fallout. That’s a lot of hires; some perspective may be in order here.
Also, while Average Hourly Earnings grew a notable +0.6% in August, and +4.3% year over year, Labor Force Participation remained stubbornly in-range at 61.7%. It would seem even higher wages are not moving the needle on the amount of capable workers re-entering the labor force. That said, a 5.2% unemployment rate, considering how far we’ve come over the past year and a half, is nothing to sneeze at.
Pre-markets traded in the red ahead of the opening bell, in a week that looks mixed to mildly down overall. The disappointing BLS jobs headline does not have much to do with this; bumping up against new record closing highs over the past couple weeks on the S&P 500 and the Nasdaq, investors have grown cautious. Fewer catalysts out of earnings season, and approaching the more historically challenging autumn months, likely have as much to do with this trepidation as the soft labor force numbers this morning did.
Questions or comments about this article and/or its author? Click here>>