US in August added just 235K non-farm payrolls jobs less than forecasted 750k as consumer confidence us at 11 year lows. July prev 943k was revised to 1053k. Unemployment rate remained at 5.4%. US Average Hourly Earnings (M/M) rose to 0.6%.
US in August added just 235K non-farm payrolls jobs less than forecasted 750k as consumer confidence us at 11 year lows. July prev 943k was revised to 1053k. Unemployment rate remained at 5.4%. US Average Hourly Earnings (M/M) rose to 0.6%.
August 2021 U.S. Employment Report
The Covid-19 virus again threatens the global economy. Is this Deja vu? The world’s economy was shut down and much of America has stay at home orders. Jobless claims numbers have been improving after records and unfortunately the story is much worse as people have not all been able to return to work with jobs replaced.
The May through November reports however were a surprise gain in jobs. The expectation had been for more recovery in job losses for December until new lockdowns came into affect and we saw a loss of 140,000 jobs. We rebounded Jan somewhat with 49,000 new jobs and an upwardly revised 468K in February. The US economy added 916K jobs in March of 2021, the strongest employment growth in 7 months, with the largest gains occurring in leisure and hospitality, public and private education, and construction.
However the March number was revised lower in April to 770k from 916k. In May we saw 559K non-farm payrolls jobs, less than forecasted 674k new jobs, April prev 266k was revised to 278k. US in June added 850K non-farm payrolls jobs more than forecasted 720k, May prev 559k was revised to 583k. US June ADP employment +692K was higher than +600K expected.
The market had expected the August report released Friday to show nonfarm payrolls rise 750k new jobs which it beat with 235k new jobs with a sputtering economy. The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 5.4%.
August 2021 US Employment Report & Expectations
Employment:
- Non-farm payrolls 235k vs (est 733K; prevR 1053K; prev 943K)
- Unemployment Rate: 5.2% (exp. 5.2%; prev. 5.4%)
- Participation Rate Aug: 61.7% (est 61.8%; prev 61.7%) (63.3% highest since 2014)
- US Underemployment Rate Aug: 8.8% (prev 9.2%)
- Two month net revision +134K Prior +119k +27K -78k +158k -159k +11k +15k +145k
- Manufacturing Payrolls Aug: 37K (est 25K; prevR 52K; prev 27K)
- Private Payrolls Aug: 243K (est 610K; prevR 798K; prev 703K)
- Long-term unemployed at 3.2m vs 3.425m prev
- The employment-population ratio 58.5% vs 58.5% prev (61% before pandemic)
More-vaccinated populations and fewer hospitalizations overall, strong recoveries in leisure and hospitality services benefited states in the Northeast and West in August. Job gains were led by Nevada, California, New Jersey, Washington, and New York. With the Delta variant striking less severely in these two regions, consumers continued their early summer trend of resuming more normal patterns of leisure spending and travel. – IHS markit
Where the jobs were:
- Goods producing
- Service producing
- Government 2
- Part-time employment
- Manufacturing jobs
- Construction
- Leisure and hospitality
- Local government education
- Professional business at and services
Government Jobs
Manufacturing Jobs
Wages:
- Average hourly earnings M/M: +0.6% (exp. +0.3%; prev. +0.4%)
- Average hourly earnings y/y (est 3.9%; prev 4.0%
Hours:
- Average weekly hours All Employees: 34.7 (est 34.9; prev 34.8 prevR 34.7)
Household Survey Data
The unemployment rate declined by 0.2 percentage point to 5.2 percent in August. The number of unemployed persons edged down to 8.4 million, following a large decrease in July. Both measures are down considerably from their highs at the end of the February-April 2020 recession. However, they remain above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million,
Among the major worker groups, the unemployment rates for adult men (5.1 percent) and Whites (4.5 percent) declined in August, while the rate for teenagers (11.2 percent) increased. The jobless rates for adult women (4.8 percent), Blacks (8.8 percent), Asians (4.6 percent), and Hispanics (6.4 percent) showed little change over the month.
Among the unemployed, the number of permanent job losers declined by 443,000 to 2.5 million in August but is 1.2 million higher than in February 2020. The number of persons on temporary layoff, at 1.3 million, was essentially unchanged in August. This measure is down considerably from the high of 18.0 million in April 2020 but is 502,000 above the February 2020 level. The number of reentrants to the labor force increased by 200,000 in August to 2.5 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)
The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 246,000 in August to 3.2 million but is 2.1 million higher than in February 2020. These long-term unemployed accounted for 37.4 percent of the total unemployed in August. The number of persons jobless less than 5 weeks, at 2.1 million, was little changed.
The labor force participation rate, at 61.7 percent in August, was unchanged over the month and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The participation rate is 1.6 percentage points lower than in February 2020. The employment-population ratio, at 58.5 percent, was little changed in August. This measure is up from its low of 51.3 percent in April 2020 but remains below the figure of 61.1 percent in February 2020.
In August, the number of persons employed part time for economic reasons, at 4.5 million, was essentially unchanged. There were 4.4 million persons in this category in February 2020. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.
The number of persons not in the labor force who currently want a job declined by 835,000 in August to 5.7 million but remains higher than the level in February 2020 (5.0 million). These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.
Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force, at 1.6 million in August, decreased by 295,000 over the month. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 392,000 in August, down by 115,000 from the previous month.
Household Survey Supplemental Data
In August, 13.4 percent of employed persons teleworked because of the coronavirus pandemic, little changed from the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.
In August, 5.6 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is up from 5.2 million in July. Among those who reported in August that they were unable to work because of pandemic-related closures or lost business, 13.9 percent received at least some pay from their employer for the hours not worked, up from 9.1 percent in the prior month. Among those not in the labor force in August, 1.5 million persons were prevented from looking for work due to the pandemic, little changed from July. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.)
These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm
Establishment Survey Data
Total nonfarm payroll employment rose by 235,000 in August, following increases of 1.1 million in July and 962,000 in June. Nonfarm employment has risen by 17.0 million since April 2020 but is down by 5.3 million, or 3.5 percent, from its pre-pandemic level in February 2020. In August, notable job gains occurred in professional and business services, transportation and warehousing, private education, manufacturing, and other services. Employment in retail trade declined over the month. (See table B-1. See the box note on page 5 for more information about how the establishment survey and its measures were affected by the coronavirus pandemic.)
Employment in professional and business services increased by 74,000 in August. Employment rose in architectural and engineering services (+19,000), computer systems design and related services (+10,000), scientific research and development services (+7,000), and office administrative services (+6,000). Since February 2020, employment in professional and business services is down by 468,000, over half of which is in temporary help services (-262,000).
Transportation and warehousing added 53,000 jobs in August, bringing employment in the industry slightly above (+22,000) its pre-pandemic level in February 2020. Employment gains have been led by strong growth in couriers and messengers and in warehousing and storage, which added 20,000 jobs each in August. Air transportation also added jobs (+11,000), while transit and ground passenger transportation—which includes school buses—lost jobs (-8,000).
In August, employment increased by 40,000 in private education, declined by 21,000 in state government education, and changed little in local government education (-6,000). In all three industries, these employment changes followed job gains in June and July. August marks the beginning of the traditional back-to-school season. However, recent employment changes are challenging to interpret, as pandemic-related staffing fluctuations in public and private education have distorted the normal seasonal hiring and layoff patterns. Since February 2020, employment is down by 159,000 in private education, by 186,000 in state government education, and by 220,000 in local government education
Manufacturing added 37,000 jobs in August, with gains in motor vehicles and parts (+24,000) and fabricated metal products (+7,000). Employment in manufacturing is down by 378,000 from its prepandemic level in February 2020.
The other services industry added 37,000 jobs in August, but employment is 189,000 lower than in February 2020. In August, employment rose in personal and laundry services (+19,000) and in repair and maintenance (+9,000).
Employment in information increased by 17,000 in August, reflecting a gain in data processing, hosting, and related services (+12,000). Employment in information is down by 150,000 since February 2020.
Employment in financial activities rose by 16,000 over the month, with most of the gain occurring in real estate (+11,000). Employment in financial activities is down by 29,000 since February 2020.
Mining added 6,000 jobs in August, reflecting a gain in support activities for mining (+4,000). Mining employment has risen by 55,000 since a trough in August 2020 but is 96,000 below a peak in January 2019
Employment in retail trade declined by 29,000 in August, with losses in food and beverage stores (-23,000) and in building material and garden supply stores (-13,000). Retail trade employment is down by 285,000 since February 2020
In August, employment in leisure and hospitality was unchanged, after increasing by an average of 350,000 per month over the prior 6 months. In August, a job gain in arts, entertainment, and recreation (+36,000) was more than offset by a loss in food services and drinking places (-42,000). Employment in leisure and hospitality is down by 1.7 million, or 10.0 percent, since February 2020.
In August, employment showed little change in other major industries, including construction, wholesale trade, and health care. Average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents to $30.73 in August, following increases in the prior 4 months. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.99.
The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.
In August, the average workweek for all employees on private nonfarm payrolls was 34.7 hours for the third consecutive month. In manufacturing, the average workweek fell by 0.2 hour over the month to 40.3 hours, and overtime remained at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours.
The change in total nonfarm payroll employment for June was revised up by 24,000, from +938,000 to +962,000, and the change for July was revised up by 110,000, from +943,000 to +1,053,000. With these revisions, employment in June and July combined is 134,000 higher than previously reported. (Monthly -5- revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.
The Employment Situation for August is scheduled to be released on Friday, October 8, 2021, 8:30 a.m. (ET)
August 2021 ADP U.S. Employment Report
ADP National Employment Report: Private Sector Employment Increased by 374,000 Jobs in August
August 2021 Report Highlights
- Total U.S. Nonfarm Private Employment: 374,000
By Company Size
- – Small businesses: 86,000 — 1-19 employees 25,000 — 20-49 employees 61,000
- – Medium businesses: 149,000 — 50-499 employees 149,000
- – Large businesses: 138,000 — 500-999 employees 41,000 — 1,000+ employees 96,000
By Sector
– Goods-producing: 45,000
- — Natural resources/mining 9,000
- — Construction 30,000
- — Manufacturing 6,000
– Service-providing: 329,000
- — Trade/transportation/utilities 18,000
- — Information 0
- — Financial activities 13,000
- — Professional/business services 19,000
- – Professional/technical services 18,000
- – Management of companies/enterprises -1,000
- – Administrative/support services 3,000
- — Education/health services 59,000
- – Health care/social assistance 39,000
- – Education 19,000
- — Leisure/hospitality 201,000
- — Other services 19,000
* Sum of components may not equal total, due to rounding. – Franchise Employment** — Franchise jobs 52,300
“Our data, which represents all workers on a company’s payroll, has highlighted a downshift in the labor market recovery. We have seen a decline in new hires, following significant job growth from the first half of the year,” said Nela Richardson, chief economist, ADP.
“Despite the slowdown, job gains are approaching 4 million this year, yet still 7 million jobs short of pre-COVID-19 levels. Service providers continue to lead growth, although the Delta variant creates uncertainty for this sector. Job gains across company sizes grew in lockstep, with small businesses trailing a bit more than usual.”
Mark Zandi, chief economist of Moody’s Analytics, said, “The Delta variant of COVID-19 appears to have dented the job market recovery. Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic.”
The ADP estimate, done in conjunction with Moody’s Analytics, has varied widely from the government’s official nonfarm payrolls report, particularly during the pandemic.
Source: Automatic Data Processing, Inc
Jobless Claims for the week ending June 26th 2021
Initial jobless claims 364K versus 390,000 estimate. Prior week revised to 415K vs 411 last week. The data is the lowest since March 14, 2020 4-week moving average of initial jobless claims 392.75K vs 398.75K.
Continuing claims rises to 3469K vs 3382K estimate. The prior week was revised 23K to 3413K from 3390K previously reported (was a record low last week) 4-week moving average of continuing claims came in at 3481.75K vs 3556.75. The 4-week moving average is at the lowest level since March 21, 2020.
The largest increases in initial claims for the week ending June 19 were in Pennsylvania (+14,715), Michigan (+1,862), and Texas (+1,814),
The largest decreases were in Illinois (-4,762), California (-4,112), Ohio (-2,955), Florida (-2,229), and Georgia (-1,826).
In addition, many states recently decided to withdraw from federal unemployment benefit programs, following reports that it has been more difficult to hire as the benefits pay more than most minimum wage jobs. source: U.S. Department of Labor
Challenger, Gray & Christmas June Job Cuts Report
US-based companies announced 20,476 job cuts in June of 2021, the least since June of 2000 and 88% lower than in the same period last year.
“Companies are holding on tight to their workers during a time of record job openings and very high job seeker confidence. We haven’t seen job cuts this low since the Dot-Com boom”, said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
So far this year, employers have announced plans to cut 212,661 jobs, down 87% from the same period last year and the least since 1995 with the most redundancies announced in the Aerospace/Defense, Telecommunications and Energy.
Source: Challenger, Gray and Christmas, Inc.
Source: AFP, Challenger, DOL, TradersCommunity Data, BLS
Source: AFP, Challenger, DOL, TradersCommunity Data, BLS
From The TraderCommunity Research Desk