I think you’d be wise to hold onto your hats (or pants or knickers or whatever) come Tuesday and the end of the Labor Day holiday in the United States. Not only will everyone on Wall Street be back to work but also the news flow looks extremely heavy.
Federal Reserve Chair Janet Yellen didn’t say anything new in her speech this morning at the Fed’s Jackson Hole conference. That’s pretty much the non-news that the U.S. financial markets were hoping for
In June the U.S. economy added 288,000 jobs after adding an upwardly revised 224,000 jobs in May (up from an initial report of 217,000.) The consensus among economists surveyed by Briefing.com had projected an increase of 210,000 jobs in the month.
May’s gain of 217,000 jobs marked the fourth consecutive month that the economy added more than 200,000. That’s the first consecutive time that’s happened since early 2000. The 6.3% unemployment rate is an almost six-year low. On the other hand, at 6.3% or 12.2% unemployment isn’t especially low, and the labor participation rate remained a puzzle at just 62.8%
Last week the numbers for initial claims for unemployment threw a scare into the financial markets and economists when they showed a strong bump upwards to 344,000 new claims filed for the week. The likelihood was that this was just the usual Easter-related noise in the data but investors and traders could not absolutely rule out the possibility that the labor market had worsened.
The payrolls number shows that the economy added 288,000 jobs in April. That’s a huge piece of good news. But workers fled the workforce in huge numbers with the labor force dropping by 806,000 in the month. That had the effect of lowering the unemployment rate to 6.3% from 6.7% in March. But the number of people actually working in the U.S. economy fell by 73,000.
The U.S. economy added 192,000 jobs in March. That was slightly below the 195,000 expected by economists. The Bureau of Labor Statistics updated its survey for February to show the economy added 197,000 jobs that month and not 175,000. The official unemployment rate remained at 6.7%. Economists had expected the rate to tick down to 6.6%.
There was enough good news in the February jobs numbers to keep alive hopes that the recent sluggishness in the U.S. economy is “only cold weather.” But with the S&P 500 at new all-time highs this week, is that story enough?
This morning’s January jobs number was disappointing. The economy created 113,000 net new jobs against a consensus among economists surveyed by Briefing.com of 175,000. The very, very disappointing December total of 74,000 was revised upward, but only by a tiny 1,000 jobs. And yet the U.S. stock market is up strongly today.
I think tomorrow’s jobs number for January is likely to have a big effect on the markets. But I’m not sure we’ll really learn much of anything about the economy because of uncertainties in the data.
