- by New Deal democrat
As I previously indicated, two items I was particularly watching for in this morning’s report were (1) manufacturing hours and payrolls - to see if that white-hot sector was holding up in the face of supply bottlenecks, and (2) whether there were continued gains in leisure and hospitality jobs, or whether Delta had caused those to stall.
While this morning’s report came in well short of expectations, with the big positive revisions to previous months the 6 month average of monthly gains is still over 600,000.
Here’s my synopsis of the report:
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and will help us gauge how strong the rebound from the pandemic will be. These were mixed, and net to neutral:
Wages of non-managerial workers
Aggregate hours and wages:
Other significant data:
Once again there were two very different reports: the establishment survey was relatively weak for the second month in a row (again strongly influenced by the seasonality of the education sector), while the household survey was very strong.
In general there were weak gains across the board in all sectors of business hiring. Of the two areas I was most paying attention to, manufacturing hours were steady, and payrolls increased at their typical rate since the pandemic lockdowns ended. Meanwhile the food and beverage and wider leisure and hospitality sectors had their second month of very weak gains in a row, indicating a major impact from the Delta wave on consumer behavior. The most positive news was the continued strong increase in aggregate employee hours and wages, plus the second month in a row of very positive revisions to the prior two months’ data.
On the household side of the report, full time jobs increased sharply, while part time jobs declined slightly, and total jobs increased over half a million for the second month in a row. Both the unemployment and underemployment rates declined sharply once again. On the other hand, those not in the labor force who nonetheless want a job now increased.
I suspect that the more volatile household report is giving us a slightly leading signal vs. the establishment report, so I am discounting a little bit the mediocre job sector gains in the establishment report. At the same time, it is clear that the pandemic continues to have a big negative effect on services that involve indoor activities.
All in all, a decent positive report - just not as good as most people were hoping for.