But other details from the Labor Department’s closely watched employment report on Friday were fairly strong, with the unemployment rate at a 17-month low of 5.2% and job growth rising sharply in July. Wages have risen a solid 0.6% and fewer people are experiencing long-term unemployment.
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This points to the underlying strengths in the economy although growth in the third quarter appears to be slowing due to the growing infection, driven by the delta variant of the coronavirus, and the persistent shortage of raw materials, which is driving automobile sales and re-stopping. Non-farm pay increased 235,000 jobs last month, the lowest profit since January. The data for July was revised to create 1.053 million jobs instead of the previously reported 943,000.
As a result, in February 2020, the level of employment reached the peak of about 5.3 million jobs.
Early August pay-roll print fell short of expectations and has been slower than average three-month job growth from July over the past few years, including 2020.
Employment in the leisure and hospitality sector remained unchanged as wages in restaurants and bars fell by 42,000, offsetting profits of 36,000 in industrial, entertainment and recreational jobs. Retailers leave 29,000 jobs.
Professional and business services, transportation and warehousing, as well as manufacturing, have added 37,000 jobs. The input crisis, especially the semiconductor, which has limited factory recruitment due to frustration in the production and sales of motor vehicles.
The shortage of raw materials has made it difficult for businesses to replenish the list. Motor vehicle sales fell 10.7% in August, prompting economists at Goldman Sachs and JPMorgan to cut their third-quarter GDP growth forecast to 3.5% from an annual rate of 8.25%.
Government salaries fell in August as state government education lost 21,000 jobs. The Bureau of Labor Statistics, which compiles the employment report, warns that “recent employment changes are challenging to explain, as the rise of epidemic-related workers in public and private education has distorted the pattern of normal seasonal recruitment and layoffs.”
U.S. stocks have opened less. The dollar has slipped against the basket of coins. US Treasury prices have fallen.
Household details are strong
The details of the small family survey from which the unemployment rate came are fairly exaggerated.
The unemployment rate fell to 5.2%, the lowest since March 2020 from 5.4% in July. However, people mistakenly classify themselves as “employed but absent at work”. Without this problem, the unemployment rate would be 5.5%.
Although the participation rate was stable at 61.7%, about 190,000 people entered the workforce last month. More encouragingly, the number of permanent job losses dropped from 443,000 to 2.5 million. The number of long-term unemployed fell to 3.2 million from 3.4 million in the previous month. Officially.4. They accounted for 37.4% of the million unemployed people, down from .3.3% in July. The unemployment period fell to 14.7 weeks from 15.2 weeks in July.
The employment report will be analyzed by investors to determine the timing of the Federal Reserve’s announcement as it begins to return to its broader monthly bond-buying program. Fed Chair Jerome Powell confirmed the ongoing economic recovery last week, but the U.S. Federal Reserve can’t wait to say when this asset purchase could happen “this year.”
Some economists do not believe that the lower-than-expected salary-allowance numbers are weak enough that the Fed will move away from its “this year” signal.
At the end of June there were a record 10.1 million job opportunities. Lack of affordable childcare, the risk of coronavirus infection, the benefits of liberal unemployment funded by the federal government, as well as epidemiological retirement and career changes have been disconnected.
There is cautious optimism that the labor pool will increase as schools reopen and government-funded facilities expire on Monday. But the Delta variant could delay the return to labor by some unemployed in the near term.
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