The Jobs Machine Rolls 
Leading up to the jobs report released last week, all indications were that the good times would continue. We had an upward revision in the measure of economic growth for the last quarter, consumers continue to spend, and confidence is soaring. Therefore, the markets were predicting another strong employment report, especially considering that last month’s numbers were a bit lighter than expected. Of course, each release is subject to revisions which is what makes the reports harder to interpret from month-to-month.
The number of jobs added was reported at 201,000 for August. This was higher than expected. The previous months were revised downward by 50,000. The headline number was the unemployment rate, which came in at 3.9%. This number carries more important when looking at the labor participation rate, which measures how many people are coming back to the workforce. The rate came in at 62.7%, which was down from last month because of more individuals re-entering the workforce.
The Fed will be meeting at the end of the month, and certainly, these numbers will be considered when they decide whether to raise short-term interest rates. Right now, the markets are banking on another 1/4% increase, especially considering the statements recently made by the members of the Fed, including Chairman Powell. Even more important than the gain in jobs, the acceleration in wage growth reported for last month certainly supports this prediction.
Jeff Flees, Loan Academy September 2018
Published on 2018-09-12 15:53:04
