US Slows on Jobs Gains in August

August’s jobs report shows that the economy is not maintaining its momentum in growth, likely due to an increase in coronavirus cases, and a Fed taper may be further off than expected.

article-image

Blockworks exclusive art by Axel Rangel

share

key takeaways

  • The US economy added 235,000 jobs in August, missing analysts’ expectations of 750,000
  • August’s employment rate dipped slightly from 5.4% in July to 5.2%

The United States added 235,000 jobs in August, majorly missing analysts’ estimates and showing a significant setback from gains made earlier in the summer, according to data from the Bureau of Labor Statistics. 

In June and July the US economy added 962,000 and 1.05 million jobs, respectively. Friday’s disappointing jobs report is reminiscent of those during severe lockdown months and signals that a rise in Delta variant coronavirus cases is putting a strain on recovery.

Unemployment rate
Source: Bureau of Labor Statistics

August’s unemployment rate was 5.2%, down slightly from July’s 5.4%. Pandemic-time unemployment peaked in April 2020, when it hit 14.8%. 

Employment in the leisure and hospitality sector for August was unchanged, according to the Labor Department. There were “notable gains” in professional and business services, transportation and warehousing, private education, manufacturing and other services, the report revealed. Retail jobs declined by 29,000.

For the first time since December, there was an increase in employees working from home. 

Equities mostly dipped slightly following the release of the report, with the S&P 500 pulling back from it’s intraday record high set Thursday. The Nasdaq was little changed while the Dow slipped about 0.2%.  

“Over the past two days, thanks to the soft ADP jobs report and underwhelming employment index in the manufacturing PMI, markets have somewhat aggressively priced in a slightly disappointing jobs number in today’s report (say under 500K),” wrote Tom Essaye, founder of Sevens Report Research, in a note on Friday. 

A mild decline in stocks was to be expected, but a larger dip would have been surprising given recent data, Essaye said. Jobs added coming in between 200,000 and 900,000 shows that recovery is continuing, ​​but a more aggressive taper from the Federal Reserve is not yet needed. 

August’s jobs numbers come in just weeks after Fed Chairman Powell revealed that tapering efforts may start before the end of the year. Powell noted that the economy has progressed since July in terms of employment numbers, but the rise of the delta variant may pose additional challenges following the Jackson Hole policy forum, held virtually for the second year in a row. 

The slightly more hawkish stance from late August is likely to turn more dovish if labor data continues to disappoint. 

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

5.png

Research

This months PPGC covered four main areas. Firstly, is a discussion around PIP-48 which is an introduction of Path Based Storage Schemes (PBSS). Secondly is the a implementation of DNS Discovery which enhances node synchronization by providing secure and efficient peer connections. Thirdly an update on PIP-47 Delayed for Security. Lastly, an overview of the Season 1 Transparency Report for the Polygon Community Grants Program.

article-image

Pro-crypto Republican Bernie Moreno beat anti-crypto Democrat Sherrod Brown in Ohio’s senate race

article-image

Bitcoin markets soared just after 10 pm ET on election night, briefly surpassing $75,000

article-image

Largely seen as pro-crypto, Donald Trump is set to once again take the White House

article-image

Moreno was leading Brown 50.6% to 46% as of 11:30 pm ET, when 91% of votes had been reported

article-image

BlackRock’s Samara Cohen said “a fair amount of plumbing” is needed to unlock the ability for pensions and endowments to gain BTC exposure