They were the data that investors had been waiting for since last month's Fed Symposium in Jackson Hole, Wyo., but after warnings of "technical difficulties" at the Bureau of Labor Statistics, we weren't sure when we were going to get the report. In the end, it worked out ... and August payrolls are here and investors have mixed thoughts.
In August the U.S. economy added 22,000 jobs, according to the bureau's figures, less than a third of the 75,000 that analysts polled by Bloomberg were looking for. Unemployment stayed at 4.3%, while labor-market participation ticked up a tad.
Additions in health care (+31K) and social assistance (+16K) were slower than they were in recent months and were easily offset by declines in government (-15K), manufacturing (-12K), and construction (-7K), among others.
Downward revisions in June and a small bump in July payrolls brought the three-month average in job additions to 29,000. That's a considerable drop from the 50K, 100K, and even 200K+ payroll numbers we saw in reports after the economy reopened from the Covid-19 pandemic.
In conversation with Elizabeth Crofoot, senior economist and principal researcherat Lightcast, we reckon these smaller numbers might just be the new reality.
Friday Reading:
In response, the Dow (-0.56%) and S&P 500 (-0.45%) and the Nasdaq (-0.19%) are lower, reversing gains from futures trading. At last check the Russell 2000 ticked up 0.19%. The Dollar Index (-0.91%) is also decaying as the buck falls against other world currencies.
Meanwhile, the two-year yield fell below 3.5% (off 10 basis points); the 10-year fell below 4.1% (down 7.8 bps); and the 30-year approached 4.81% (losing 4 bps). Those declines imply that some investors are prepping for as many as three rate cuts by year's end.
Let's wait and see how the inflation numbers looking next week. For now, with no earnings in sight today, the market is business as usual.
TurboTax via TheStreet
-- Noah Weidner, markets reporter
