US Employment Not So Strong
Join me in our ‘Weekly Market Update’ to decipher what to expect in the coming weeks & months.
Happy Friday! Brian Manning here with the weekly update. Let’s get right into it. This week started off with Labor Day on Monday. I can’t believe it’s already Labor Day; it’s unbelievable how quickly this summer has flown by.
On Tuesday, the news was relatively quiet with not much to discuss. However, the week started heating up on Wednesday with the release of the JOLTS report, which covers job openings across the country for July. Job openings decreased from 7.9 million to 7.7 million, and June’s figures were revised downward by about 330,000 jobs. This indicates a reduction in available job openings.
Thursday brought us the ADP employment report, which is typically released on the first Wednesday of every month but was delayed due to Labor Day. This report, covering August, had an expectation of 145,000 jobs created. However, only 99,000 jobs were actually created. Additionally, July’s figures were revised down from 122,000 to 111,000 jobs, marking the lowest ADP report since 2021. This suggests continued softening in the labor market.
Today, we received the BLS report from the Bureau of Labor Statistics. This report is crucial for the Federal Reserve’s upcoming decisions on interest rates during their meeting on September 17th and 18th. While many anticipate a rate cut, the precise amount—whether a quarter percent or a half percent—is still uncertain.
For August, the BLS report had an expectation of 165,000 jobs created but only reported 142,000. Additionally, the prior two months’ figures were revised downward by 86,000 jobs. Notably, the June employment report initially announced 206,000 jobs created. This number was later revised down to 179,000, and then further adjusted to 118,000. This ongoing revision process can significantly impact market reactions; for example, had the 118,000 figure been reported initially, market reactions might have been different, potentially leading to lower interest rates.
Similarly, July’s report originally showed 114,000 jobs created but was later revised down to 89,000. This illustrates the impact of revisions on market perceptions and interest rates.
To date, revisions have lowered job figures by 365,000 for the year. Given this trend, it’s likely that August’s reported 142,000 jobs created will also be revised downward, potentially to below 100,000.
In terms of unemployment, the rate decreased from 4.3% to 4.2%, but this change reflects a shift from full-time to part-time work. Full-time workers lost jobs numbering about 438,000, while part-time workers—many of whom would prefer full-time positions—rose by 527,000. Thus, the apparent decrease in unemployment may not fully capture the labor market’s true state.
I’ll be around all weekend if you have any questions. If you’re interested in how we are closing purchase transactions in just 10 days, give me a call. Have a great Friday and a wonderful weekend!
-Brian
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