Shares appeared to come in over the long weekend with minimal note following a disappointing report on August jobs.
Non-farm payrolls rose by 235,000 last month, less than half of the projected 720,000 gain. Economists had predicted that employment data would coincide with previous months of solid recovery, but concerns about the delta variant and labor supply problems weighed on the economy.
Below are five experts on what this means for reducing the Federal Reserve’s time and the US economic recovery in the coming months.
Kate Moore, head of thematic strategy for BlackRock’s Global Allocation investment team, says it’s part of the broader supply chain problem.
“We just don’t have a supply of workers. We don’t have supply, either in the supply chain, to inventories in different industries. That’s something companies have been talking about all summer. They’ve talked about it. during earnings calls … And it really seems like there is a limitation or at least a headwind against the progression of economic growth due to supply constraints.If it were demand, I think I would be more concerned 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 job market.
“Where we will see profits, industries and jobs that are most willing to make a profit during the second half of the year are those low-wage jobs that were lost, so it’s very likely that this growth wages decrease jobs return and more people enter the labor market.It could be just the artifact of the composition of jobs that exists now, which does not really reflect what would be needed if we saw a full recovery of the labor market , which means returning to the circulation of these low – paid jobs. “
Judy Shelton, an economist and former Fed nominee, is seeing the impact on Fed timeline.
“I think that figure is very sad when it comes to the real economy, but it somehow becomes a field day for Fed observers because it will now focus on accumulation not just the announcement of the September 22 on whether the Fed will start to shrink, it could now be November 3 or December 15. If we see people not going back to work despite all the “Help Wanted” signs that everyone sees in so many stores, restaurants and service industries, if I don’t see it, how can the solution be that the Fed buys more Treasury securities, more agency mortgage securities? I just don’t understand how the Fed can justify its prolonged monetary accommodation.It’s just more bell tower. the solution.”
Diane Swonk, chief economist at Grant Thornton, says this is part of a broader slowdown.
“Unfortunately, we are also seeing a huge slowdown globally. We have seen really weak figures coming out of China recently, the delta variant is hitting economies that have escaped other waves and I think it is very important to keep that in mind. This hurts supply chain disruptions that we have seen explode around here, but it also hurts demand.The issue of labor supply is much deeper.This is at the same time a collision of supply and demand, but demand has eased. It really needs to be emphasized. We are now seeing GDP growth below 4% in the third quarter. child care, the hiring of child care services to child care services fell again for the second month in a row and we saw participation rate of some of the single mothers who are the most vulnerable to this still weak disease, and they are the ones who will not be able to return until their children can stay in school. And the fact that many schools go back to quar antine after they open, makes this idea clearer that the supply of labor there would be much easier as we reopen the schools, and I think that’s another issue. “
David Kelly, chief global strategist at JPMorgan Asset Management, says be wary of the September job report, as it could show the impact of the delta variant spread.
“In the last two years, if you look at the wages of non-supervisory production workers, they’ve increased by 9.9% over a two-year period; that’s the strongest we’ve seen in 40 years. And what he says is that for several years reasons why, right now there is no labor supply in America.We have 10.1 million jobs, half of America’s small businesses have jobs that they can’t cover, so this is really a labor supply constraint; I think the delta variant will have a significant impact in September, even more so than in the August report, because I think it increased the pace over the So you have a slower growing economy, you probably still have higher interest rates because you have higher inflation, which will be a challenge for the equity market, so I think it’s very important buy things that have a good price here and that don’t have a huge P / E Relationships, huge multiples, because these things will be challenged by a slower-growing global economy with higher inflation and interest rates. “
Exemption from liability