A Steller Jobs Report

August 6, 2021

The U.S. July employment situation improved more rapidly than anticipated, encouraging speculation that Fed tapering will begin sooner and transpire more quickly than monetary officials have been implying. Non-farm payroll jobs jumped 943k last month, and employment rises in May-June was revised 119k higher. That puts the July level of jobs 192k above what analysts were assuming and 16.7 million above the April 2020 low. Two-thirds of July’s incremental jobs growth involved the leisure & hospitality and education sectors. Moreover, the unemployment rate dropped 0.3 percentage points to 5.4%, a 16-month low. Labor market participation and the jobs-to-population ratios each increased, and the broader unemployment plus under-employment U6 rate fell 0.6 percentage points on month and by a full percentage point over the past two months to 9.2%. All this was accompanied by an acceleration of average hourly earnings growth to 4.0% and news that 9.2 million job openings remain unfilled.

For the first day in several months, there was a six-figure increase in newly reported U.S. covid-19 infections on Thursday. While today’s labor market report was certainly welcome, the upsurge in the pandemic and the pathological reluctance of many anti-vaxxers to take their chances against this lethal disease rather than get a vaccine proven to be highly effective casts great doubt over the U.S. and world economic outlook.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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