Jobs Data Rundown
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While the August jobs report looked strong on the surface, a deeper look shows more signs of slowdown says Peter Boockvar. Slowdown isn’t the same as reversal, though. Demand for labor is still far exceeding the supply.
Key Points:
August payrolls grew 187,000 but the two prior months were revised downward a total 110,000.
A large 736,000 increase in the labor force drove the unemployment rate up to 3.8%, the highest since early 2022.
This sent the participation rate rose to 62.8%, the highest since January 2020.
Notably, all the job growth came in those age 16-19 and 55+. Prime age (25-54) employment was unchanged.
Average weekly earnings rose 0.5% for the month and 4% over the last year.
Another decline in temporary hiring is a notable sign of slowdown.
Bottom Line: Federal Reserve officials will likely see this data as confirmation their plan is working. Boockvar believes they will not raise rates further, but instead rely on a “higher for longer” policy along with quantitative tightening to keep inflation at bay.
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