US August non-farm payrolls +235K vs +750K expected

August 2021 US non-farm payrolls data

• Prior was 943K (revised to 1053K)
  
• Two month net revision +134K
  
• Unemployment rate 5.2% vs 5.2% expected
• Prior unemployment rate 5.4%
• Participation rate 61.7% vs 61.6% expected (was 62.8% pre-pandemic)
• Prior participation rate 61.7%
• Underemployment rate 8.8% vs 9.5% expected (9.2% prior)
  
• Average hourly earnings +0.6% m/m vs +0.3% expected
• Average hourly earnings +4.3% y/y vs +4.0% expected
• Average weekly hours 34.7 vs 34.8 expected
• Change in private payrolls +243K vs +665K expected
• Change in manufacturing payrolls K vs +25K expected
• Long-term unemployed at 3.2m vs 3.4m prior
• The employment-population ratio, at 58.5% vs 58.5% prior (61% before pandemic)
  
• Full report
  

The household survey was decent with unemployment continuing to fall but the establishment survey was poor with 'leisure and hospitality' adding no jobs in a sign that pandemic-related re-hiring  stalled in the month. In particular, there were 42K job losses in food services and drinking places.

The higher wage numbers reflect fewer low-wage workers from pandemic-affected industries. I wouldn't take that as a positive sign. Part time jobs for economic reasons were unchanged at 4.5 million.

This dooms the chance of a September taper announcement and may even take chance of a taper hint off the table. What's important to note is that the Fed will only get one more jobs report before the November FOMC. That meeting is on the 2nd and the Oct jobs report isn't until the 5th. So this considerably dims the chance of a November taper announcement.

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September 04, 2021 at 12:30AM
Adam Button
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