New data on the labor market have just been reported in the US. They were also characterized by the pandemic. The declining initial jobless claims, distorted by a change in seasonal adjustment, and the less than expected but less transparent ADP employment data provided hardly any useful indications. The employment components of the ISM PMIs increased, but both were still below the 50 point mark, so that overall we tended to be more pessimistic than the consensus.
Nevertheless, 1,371,000 new jobs were created in August. About 240,000 people came from the census. After the deforestation in April and the largest job cut in history by 20 million people, there has now been a strong increase in employment for the fourth month in a row. The increase in jobs from May to August make up – depending on the point of view, already or just now – half of the slump from spring!
The unemployment rate fell significantly unexpectedly: It fell for the fourth month in a row to 8.4%. The highest value since the Second World War of 14.7% in April was therefore followed by successive improvements. Nobody expected such a low rate of 8.4%! Particularly gratifying: The decrease in the quota is not due to a decrease in the Labor Force.
In addition, wages rose by 0.4% m / m, the average weekly hours rose. Both of these suggest that US consumers will continue to shop with “more cash in their pockets”.
The rapid increase in the number of infections in the USA that has been observed since the end of June appeared to slow, stop or even reverse the recovery. Too early easing and an astonishing lack of need – by politicians and the population – led to a resurgence in the pandemic numbers, which increasingly threatened the stabilization of the economic recovery. However, most of the data so far indicate that the recovery process will continue in macroeconomic terms, albeit at a slightly slower pace. In addition, more practicable treatment methods with combined drugs can help reduce the number of deaths and thus reduce the risk of the ongoing “second wave” a little.
What is explosive about this job market is that it is the penultimate one before the US presidential election on November 3rd. The two candidates will draw ammunition from these numbers in the election campaign – incumbent Donald Trump probably more than his challenger Joe Biden.
The stock markets took this data relatively soberly: After yesterday’s significant declines, the Dax is still fighting for the 13,000 point mark. The euro fell slightly.
Conclusion: The increase in jobs in the USA was not quite as strong in August as in July – but that was to be expected. The solid recovery is still continuing. The job cuts in April have now been followed by four months of significant job growth. Half of the corona break-in has already or only just been made up, depending on the perspective. The recent increase in the number of pandemics in the country has not slowed the job engine as much as feared. The sharp drop in the unemployment rate to 8.4% is particularly noteworthy. The macroeconomic recovery process will continue, albeit at a slightly slower pace for the foreseeable future. An increase in the disposable income of private households suggests that consumption will remain solid. As the penultimate labor market figures before the US presidential election on November 3, they will certainly provide the incumbent Donald Trump with more usable ammunition in the election campaign!
Disclaimer: This text is a column of the North LB. 4investors is not responsible for the content of the column and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!
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