August Jobs Report: According to the new August jobs report also known as the Employment Situation Summary, released by the U.S. Bureau of Labor Statistics (BLS) for August, United States employers added 187,000 jobs, coming in above 170,000 jobs expectations that economists did forecast for August and is still a slowdown when compared to the job reports growth since last two years.
CNN revealed that the 187,000 jobs report has created optimism by the Feds that the economy is on course to nail that elusive soft landing of lowering inflation without triggering a recession since the US job market cooled back down in July.
What is The US Jobs report?
The jobs report which is usually released on the first Friday of every month is based on surveys of households and employers. It usually estimates the number of people on payrolls in the United States economy, the average number of hours they worked weekly, as well as their average hourly earnings.
The jobs report provides estimates by state and metropolitan area, and by industry. The report also tallies the hours worked and earnings of production and non-supervisory employees.
What are Economists Saying?
Economists believe that this report is the highest the labor force participation has likely been since before the pandemic in terms of rate.
Economists see this as a tug of war between the labor market and the economy, there is still a push and pull, and the labor market remains strong. According to Economists, job growth is slowing, but they don’t think that’s necessarily a bad thing. In some ways this is great. The country is beginning to see the soft landing that the Feds are hoping for.
Summary of the July Jobs Report
The unemployment rate rose by 514,000 an increase of 3.8% from 3.5% the month before, according to the report. The U.S. gained 187,000 jobs in August reflecting the impact that high interest rates on the U.S. economy as it gradually cooled from the boom during the pandemic.
- Gov +8,000
- Education and Healthcare +102,000
- Other services +13,000
- Construction +22,000
- Business services +19,000
- Leisure and Hospitality +40,000
- financial activities +4,000
- Child care services +3,000
How will the Fed react to the August jobs report?
August job gains were moderate while wage growth remained firm, showing a strong enough labor market to keep the Federal Reserve on track to raise interest rates this month. The Fed is likely to reconsider its series of rate hikes following this jobs report. Investors warned the Fed’s actions on rate hikes could still harm the economy because though these job numbers are positive, there’s still reason to worry that the Fed’s actions including any rate hikes in September could hurt the labor market.
How Investors are reacting
Stocks rose on Friday as Wall Street struggled to shake off fears that the Federal Reserve may start hiking rates again later this month. Stocks on Friday being the first trading day of September ended mostly higher.
Investors are hoping that August’s consumer price index and producer price index will hopefully indicate a downward trajectory in inflation following the speech of Jerome Powell speech during the Jackson Hole meeting which failed to clarify the path of future monetary policy.
