U.S. Job Growth Slows. Could This Impact The Fed’s Tapering Plans?

Video length 00:10:26

On the latest edition of Market Week in Review, Chief Investment Strategist for North America, Paul Eitelman, and Senior Client Investment Analyst Chris Kyle unpacked the numbers from the August U.S. jobs report. They also discussed recent PMI (purchasing managers’ index) data from Europe and China as well as the latest developments around the potential $3.5 trillion U.S. budget bill.

U.S. nonfarm payrolls fall far short of expectations, August report shows

The U.S. employment report for August, released on Sept. 3 by the Labor Department, showed that the economy added 235,000 nonfarm payrolls last month—a number Eitelman characterized as disappointing. “Consensus expectations were for around 720,000 new jobs, so this was a pretty clear miss,” he stated, noting that the weakness was most pronounced in state and local government education and in the leisure and hospitality sector.

Jobs in public education fell by 27,000 during August, Eitelman said, defying widespread expectations for a significant gain. However, the decline in hiring is probably more noise than signal, he said, noting that the data was messy and hard to interpret. The leisure and hospitality sector, meanwhile, added zero net new jobs during August, Eitelman said—a big stall after averaging 350,000 job gains a month over the past six months.

“This sector is one of the most vulnerable to COVID-19, and the steep ramp-up in infections caused by the delta variant definitely impacted hiring here,” Eitelman said, explaining that many leisure and hospitality businesses are highly dependent on in-person activities.

Despite the weakness in the August numbers, the overall U.S. economic recovery appears to be continuing at a fairly healthy pace, he said, noting that job openings remain elevated—indicative of a strong hiring demand from employers. Amid this demand, there are some signs that wage pressures are also mounting, Eitelman said, pointing out that monthly wages climbed 0.6% from July.

1 2 3
View single page >> |


These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions ...

How did you like this article? Let us know so we can better customize your reading experience.
Comments have been disabled on this post.