The August jobs report came in weaker than expected. So what does that mean for the markets and the Fed? Five experts share their take.
Stocks looked to enter the long weekend on a dour note after a disappointing August jobs report. Nonfarm payrolls rose by 235,000 last month, less than half the gain of 720,000 expected. Economists had forecast employment data to match previous months of robust recovery, but delta variant concerns and labor supply issues weighed on the economy. Kate Moore, head of thematic strategy for BlackRock’s Global Allocation investment team, says it’s part of the broader supply chain issue. «We just don’t have supply of the workers. We don’t have supply whether it’s in the supply chain, inventories across a variety of different industries. This is something that companies have been talking about consistently over the course of the summer. They talked about it during earnings calls… And there does really seem to be a limitation or at least a headwind to progression in economic growth due to supply-side constraints. If it was demand side, I think I would be more worried and more concerned about how the equity market would interpret it.» Nela Richardson, chief economist at ADP, is looking for growth at one end of the labor market. «Where we’re going to see the gains, the industries and the jobs that are most poised for gains in the second half of the year are those low-paying jobs that were lost, so it’s very likely that wage growth declines as these jobs come back and more people come into the labor market. It could be just the artifact of the composition of jobs that are out there now, not really reflective of what would be needed if we were to see a fullsome labor market recovery, which means getting those low-paid jobs back into circulation as well.
