It’s a barnburner!
The US economy added 162,000 jobs on net last month, the BLS said Friday, in a jobs report that handily topped consensus (and every estimate, for that matter) on the headline readout. Economists expected just 55,000 from the establishment survey.
Even better (or worse if you’re looking for an excuse not to raise rates in the face of elevated inflation), the accompanying revisions saw July’s headline adjusted to show a 21,000 gain against the initially-reported 23,000 loss. June’s headline was also revised up. It now reflects a 31,000 job addition.
With the revisions and the big upside surprise for August, the three-month average is 71,000. Note that a consensus print for August and no revisions would’ve left that metric at just 17,000.
The breakdown showed private payrolls rose 127,000, triple the ADP tally for August and a country mile ahead of the 50,000 consensus.
Gains were led last month by bars and restaurants, which hired 59,000 people. Local government education chipped in 42,000. Manufacturing contributed 16,000 and health care 13,000. The only drag came from the information sector, which shed 23,000 positions.
Happily, average hourly earnings were in-line at 0.3% MoM and 3.1% YoY. Those might’ve easily overshot given the strength and breadth of the hiring impulse. If they had, it would’ve added to the hawkish read-across for policy from the muscular hiring headline and upward revisions.
On the household survey side, the unemployment rate was steady at 4.1% (4.141% unrounded).
The participation rate actually moved up if you can believe it, to 61.6%, making the unchanged UNR that much more impressive.
Hell, even the employment level in the household survey rose, and not by a little bit: The gain there was 569,000.
It’s just barely an exaggeration to say this recasts the narrative around the US labor market. “Torpid” apparently isn’t the right adjective after all.
In terms of the September FOMC meeting, this jobs report raises the stakes significantly for next Friday’s CPI release. If it’s warm, Kevin Warsh will be under a lot more pressure to hike than he would’ve been had August payrolls come in weak.
What’s that banging sound? Oh, the mice are careening around in the shoebox again!
I hate to be this cynical, but when an administration gaslights on almost every issue and can’t be trusted to tell the truth and can lie right to your face when you know its a lie, can this BLS be trusted to tell the truth? Matsumoto just gets confirmed a year after McEntarfer reports not pleasing numbers. Now the numbers are pleasing. Hmmm
Everybody knows what’s happening and everybody pretends it’s not. That goes for the military as well and all the issues over there.
It’s not that we’re “pretending” we don’t know what’s happening, it’s that there’s nothing we can do about it. As long as most of us are left free to go about our daily lives unfettered, we don’t care. That’s how you build an autocracy. It’s tried and true. And it’s working here. I’m not proud to admit that I’m acquiescing to it, but life’s too short: I’m not going to jeopardize my happiness and well-being by trying to lean against this particular wind. Especially not when I don’t have kids. If I died tomorrow, I’d be a fool today for wasting time worrying about the state of American democracy. Nobody’s bothering me. For now, anyway. As for the deleterious impact this is having on, e.g., Canada, what can I say? Sorry. I truly am. But there’s nothing I can do.
You do as much as you can do, if so inclined, and otherwise cope as best you are able. If “coping” means making money, no apologies necessary. Take a vacation to Canada and spend that ill-gotten USD there, or something.
Your pragmatism echoes my own. The people who have the power aren’t doing anything, for us to take the risk is to sacrifice unnecessarily. These iterations have happened before, they will happen again. The objective should be to survive this time as well as you can. Humans are a disastrous bunch, survival of the fittest still holds true.
It’s an amazingly convoluted and delicate economic knot that’s been tied by our Dear superiors. The funniest part is Bessent, Trump and Warsh may accidentally drop a bomb on the carry trade which is “running it hot” and making dispersion the only game in town, keeping index vol low and lining Jane Street’s pockets. I’m patiently sitting in a convex left-and-right vice, paying theta for the day it finally gaps. Just because I’m paying theta doesn’t mean the position is wrong. But the hike-or-cut bullshit is hilariously illegible and everyone is apparently still trying to read it. I have other hobbies to enjoy waiting this out.
The left side of the participation rate chart argues against the right side. The last time we had a participation rate so low unemployment was 25% higher?
Yes. On its way down from 15%.
And you guys believe these numbers? Why? It is against their fed rate interest, but they figure that is covered under the table. Better to tout an employment economy for the mid-terms. Nothing this government says can be believed.