Tag: August

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August 2022 jobs report:

Job growth unexpectedly picks up in August as the workforce rises by 315,000

Nonfarm payrolls rose solidly in August amid an otherwise slowing economy, while the unemployment rate ticked higher as more workers re-entered the workforce, the Bureau of Labor Statistics reported on Friday.

The economy added 315,000 jobs this month, just below the Dow Jones estimate of 318,000 and well below July’s 526,000 and the lowest monthly gain since April 2021.

The unemployment rate rose to 3.7%, two-tenths of a percentage point higher than expected, mainly due to a rise in the labor force participation rate to 62.4%, the highest level for the year. A broader measure of unemployment, which includes discouraged workers and those who have part-time jobs for economic reasons, rose to 7% from 6.7%.

Wages continued to rise, albeit slightly less than expected. Average hourly wages rose 0.3% for the month and 5.2% year-on-year, both 0.1 percentage point below estimates.

Professional and business services led the payroll increases at 68,000, followed by healthcare at 48,000 and retail at 44,000. Leisure and hospitality, a leading sector in the pandemic-era job recovery, rose just 31,000 this month after averaging 90,000 for the previous seven months of 2022. The unemployment rate for the sector rose to 6.1%, the highest since February

Manufacturing was up 22k, financial activities were up 17k and wholesale trade was up 15k.

Markets reacted positively to the numbers, with major equity indices posting strong gains and government bond yields falling.

Four experts react to the strong job report from August

“There’s something for everyone in this report,” said Michael Arone, chief investment strategist at State Street Global Advisors. “This report supports the Fed’s ability to stage a soft landing. Markets like it.”

The jobs numbers present a dilemma for a Federal Reserve trying to control inflation.

Inflation is moving at almost its fastest pace in over 40 years as a combination of supply and demand imbalances, massive stimulus from the Fed and Congress and the war in Ukraine have pushed up the cost of living.

However, the labor market has remained strong even as other aspects of the economy have weakened. Residential construction, in particular, is likely to be in a recession.

“This is a unique time where we still have a relatively tight labor market, where there is still job growth, but companies have started to announce hiring freezes, some companies have announced layoffs,” said Liz Ann Sonders, Chief Investment Strategist at Karl Schwab. “This could very likely be a recession where you don’t see the kind of carnage in the job market that you see in most recessions.”

These pay rises came amid rising inflation and concerns about a slowing economy, which reported negative GDP numbers for the first two quarters of the year, widely seen as a telltale sign of a recession.

The Fed has tackled the inflation problem with a series of rate hikes totaling 2.25 percentage points that are expected to continue into next year. In recent days, central bank leaders have warned that they have no intention of reversing monetary tightening and expect interest rates to remain high “for some time” even if they stop raising rates.

Futures markets withdrew expectations of a third straight rate hike by 0.75 percentage points at the September meeting. The probability of this move was 62% at 10am ET, up from 75% on Thursday.

A key channel through which the Fed looks for policy action is through the labor market. Adding to the robust hiring rate, job openings are outstripping available labor by almost 2 to 1, putting wages under pressure and creating a feedback loop that has pushed up prices not just on gas and food, but also on housing and a host of other expenses drives.

There were some weaknesses in the August numbers.

Full-time jobs fell by 242,000 while part-time jobs rose by 413,000, according to the household survey, which the BLS uses to calculate the overall unemployment rate.

The job report is “not strong enough to nudge them into more aggressive rate hikes and not weak enough to slow them down,” Arone said. “I don’t think today’s jobs report will change anything about the Fed’s path.”

August payrolls are generally more volatile than other months. In 2021, the original estimate of 235,000 was finally revised down to 483,000. Over the past decade, the average revision for August has been 82,700 higher.

The BLS cut the number of payslips from 398,000 to 293,000 in June and from 528,000 to 526,000 in July, a total net decrease of 107,000 from previous estimates.

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World News

China’s exports in August beat expectations

China's exports in August beat expectations

SINGAPORE – Asia Pacific stocks were mixed in trading on Tuesday as data showed China’s August trading data was above expectations.

The Shanghai composite in mainland China gained 0.77%, while the Shenzhen share rose 0.398%.

China’s exports rose 25.6% yoy in August, customs data on Tuesday showed – above analysts’ expectations in a Reuters poll of 17.1%.

Hong Kong’s Hang Seng index gained 0.61%.

The stocks of retailers listed in the city surged after Bloomberg reported that Hong Kong will allow quarantine-free entry to mainland visitors from September 15. Chow Sang Sang rose 3.8% while Giordano International rose 2.6% and Sa Sa International rose 5.26%.

Japan’s Nikkei 225 rose 0.86% while the Topix index rose 1%, with the country’s stocks continuing to climb after two consecutive days of trading with solid gains. This comes as investor sentiment is bolstered by the prospect of further stimulus reportedly being called for by Prime Minister candidate Fumio Kishida.

Elsewhere, the South Korean Kospi lost 0.7% while the S & P / ASX 200 in Australia lost 0.24%.

MSCI’s broadest index for Asia Pacific stocks outside of Japan was below the flatline.

Elsewhere, the South Korean Kospi lost 0.7% while the S & P / ASX 200 in Australia lost 0.24%.

MSCI’s broadest index for Asia Pacific stocks outside of Japan was below the flatline.

RBA rate decision

The Reserve Bank of Australia announced on Tuesday that it would stick to its cash rate target.

In a statement, Australia’s Central Bank Governor Philip Lowe also said the RBA will buy bonds at a price of A $ 4 billion (about $ 2.98 billion) a week until at least February 2022.

In August, when the plan was announced to reduce bond purchases from A $ 5 billion to A $ 4 billion in early September, Lowe had announced that the new weekly bond purchases would last at least until mid-November.

Following that announcement, the Australian dollar changed hands at $ 0.7449 from an earlier low of $ 0.7431.

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Markets in the US were closed on Monday for a public holiday.

Currencies and oil

The US dollar index, which tracks the greenback versus a basket of its peers, came in at 92.126, still off the 92.4 level it hit last week.

The Japanese yen was trading at 109.78 the dollar, stronger than the 110.1 levels seen against the greenback last week.

Oil prices were mixed on the afternoon of Asian trading hours, with the international benchmark Brent crude oil futures rising 0.47% to $ 72.56 a barrel. U.S. crude oil futures declined 0.19% to $ 69.16 a barrel.

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World News

Jobs report August 2021 shocker: Solely 235,000 new jobs

Jobs report August 2021 shocker: Only 235,000 new jobs

Job creation in August was a huge disappointment as the economy only added 235,000 jobs, the Labor Department reported on Friday.

Economists polled by Dow Jones had sought 720,000 new hires.

The unemployment rate fell from 5.4% to 5.2%, in line with estimates.

The August total – the worst since January – is linked to heightened fears of the pandemic and the impact that rising Covid cases could have on a largely robust recovery. The weak report could tarnish the Federal Reserve’s policy as it weighs whether to withdraw some of the massive stimulus it has added since the outbreak in early 2020.

“The recovery in the job market slowed this month with a dramatic showdown in all industries,” said Daniel Zhao, chief economist at Glassdoor. “Ultimately, the wave of the Delta variant is a hard reminder that the pandemic is still in the driver’s seat and controlling our economic future.”

Leisure and hospitality jobs, which were the main driver of the overall gains at 350,000 per month for the past six months, stalled in August as the industry’s unemployment rate rose to 9.1%.

Instead, professional and business services resulted in 74,000 new jobs. Other winners included transportation and warehousing (53,000), private education (40,000), and manufacturing and other services, each increasing by 37,000.

The retail sector lost 29,000, with the bulk of it coming from food and beverage stores which saw a 23,000 decline.

“The weaker employment activity is likely both a demand and a supply story – companies have stopped hiring in the face of weaker demand and uncertainty about the future, while workers have withdrawn for health reasons,” said the Bank of America economist. Joseph Song, in a message to customers.

According to the report, the US is seeing around 150,000 new Covid cases daily, raising concerns that the recovery could stall until the latter part of the year.

“Delta is the story in this report,” said Marvin Loh, global macro strategist for State Street. “It’s going to be a bumpy rebound in the job market and one that is pushing back against a more optimistic narrative.”

During the month, the number of those who said they could not work due to a pandemic rose by about 400,000, bringing the total to 5.6 million.

“Today’s job report reflects a sharp decline in employment growth, likely due to the increasing impact of the delta variant of COVID-19 on the US economy, although August is also a notoriously difficult month due to the holidays, to be precise investigate, ”said Tony Bedikian. Head of Global Markets at Citizens.

Still, the news wasn’t all bad for Jobs.

There have been significant upward revisions over the past two months, with the grand total now standing at 1.053 million in July, up from the original estimate of 943,000, while June was raised from 938,000 to 962,000. In the two months, the revisions added 134,000 to the initial counts.

Wages also continued to accelerate, increasing by 4.3% year-on-year and 0.6% on a monthly basis. Estimates had been 4% and 0.3%, respectively.

An alternative measure of unemployment, which includes discouraged workers and part-time workers for economic reasons, fell sharply, falling from 9.6% in July to 8.9% in August.

The employment rate remained unchanged at 61.7% and was thus still well below the 63.3% in February 2020, the month before the pandemic was declared.

Employment also remained well below pre-Covid levels, with 5.6 million fewer employees and the total workforce still 2.9 million fewer.

Another key metric from the Fed, the employment-to-population measure, was 58.5%, a tenth of a percentage point more than in July, but still well below the pre-pandemic 61.1%. The measurement looks at the total number of employed persons compared to the population of working age.

August numbers have been volatile in recent years and are often revised significantly. You come amid other positive signs of employment.

Weekly unemployment reports have fallen to their lowest level since the early days of the pandemic in March 2020, but a large employment gap remains.

It’s not that there aren’t enough jobs: Recruiting firm Indeed estimates there are currently about 10.5 million open positions, a loose record for the U.S. job market. ZipRecruiter saw strong gains in job postings in the travel, arts & entertainment, and education sectors on Friday, suggesting broadly these sectors should see strong gains in the future.

Fed officials are closely monitoring job numbers for clues as to whether they can withdraw some of the political aid they have given since the pandemic began.

For the past few weeks, central bankers have been optimistic about the employment situation, but said they must see continued strength before changing course. What is at stake for now is the Fed’s massive monthly bond purchase program, which could be scaled back before the end of the year.

However, if the job data softens, it could lead Fed officials to wait until 2022 before scaling back their purchases. Fed officials have made it clear that rate hikes will come well after the taper starts.

“I still expect them to taper by the end of the year,” said Loh of State Street. “Maybe some of the more aggressive talks about something that happened in September are off the table. I think November is still a possibility.”

The Fed will next meet on September 21-22.

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World News

Information exhibits China manufacturing unit exercise progress slowed in August

Chinese stocks fall around 1%; China holds steady on benchmark lending rate

SINGAPORE – Asia Pacific stocks fell mainly in trading on Tuesday as August data showed slower growth in Chinese factory activity.

In mainland China, the Shanghai composite lost 0.75% while the Shenzhen stake lost 1.674%.

China’s factory activity grew more slowly in August compared to the previous month, data released on Tuesday showed. The official purchasing managers’ index for manufacturing was 50.1 in August compared to 50.4 in July.

PMI values ​​above 50 indicate expansion, while those below this value indicate contraction. The PMI readings are sequential and represent a monthly expansion or contraction.

Hong Kong-listed Tencent and Netease stocks fell amid regulatory concerns. They fell 3.18% and 3.46%, respectively, in the city by Tuesday afternoon. It came after new rules released Monday by China’s National Press and Publication Administration showed plans to limit the time people under the age of 18 spend playing video games to just three hours a week.

Hong Kong’s broader Hang Seng index fell 1.43%.

In Japan, the Nikkei 225 was up 0.57% while the Topix index was up 0.32%. South Korea’s Kospi gained 0.61%.

Elsewhere in Australia, the S&P / ASX 200 climbed 0.38%.

MSCI’s broadest index for Asia Pacific stocks outside of Japan fell 0.46%.

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Overnight in the States, the S&P 500 rose 0.43% to 4,528.79 while the tech-heavy Nasdaq Composite rose 0.9% to 15,265.89. The Dow Jones Industrial Average lagged, dropping 55.96 points to 35,399.84 points.

Currencies and oil

The US dollar index, which tracks the greenback versus a basket of its competitors, hit 92.573 after falling above 93.0 last week.

The Japanese yen was trading at 109.86 per dollar, weaker than yesterday against the greenback below 109.8. The Australian dollar was trading at $ 0.7304 and largely held gains after rising below $ 0.72 last week.

Oil prices were lower during Asian trading hours, with international benchmark Brent crude futures falling 0.4% to $ 73.12 a barrel. US crude oil futures declined 0.51% to $ 68.86 a barrel.

– CNBC’s Arjun Kharpal and Lauren Feiner contributed to this report.

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World News

Inventory futures rise to kick off August buying and selling after S&P notches sixth-straight profitable month

Stock futures rise to kick off August trading after S&P notches sixth-straight winning month

U.S. stock futures rose on Monday as investors geared up for the first trading day of August.

Dow Jones Industrial average futures rose 93 points, or 0.3%. S&P 500 futures gained 0.4% and Nasdaq 100 futures added 0.5%. The S&P 500 and the Dow sit less than 1% from new all-time highs.

Stocks continued to shake off concerns about the delta variant of Covid, and stocks that would benefit the most from a continued economic recovery led the gains in premarket trading Monday.

Shares of Carnival Corp. were up 3% in premarket trading. Major banks including Morgan Stanley and Bank of America were higher. Airline shares were mostly higher.

“We believe the reopening and recovery trend is on track and continue to see upside for equities,” wrote Mark Haefele, chief investment officer of global wealth management at UBS. “We expect the S&P 500 to climb to around 4,650 by June next year, versus 4,395 at present. But we see the greatest upside for cyclical parts of the market, including energy, financials, and Japanese stocks.”

The Senate was finalizing the text of a bipartisan infrastructure bill, also bolstering optimism on Monday. The bill includes $550 billion in new spending over five years. That’s on top of previously approved funds of around $450 billion.

Caterpillar shares added 1% in premarket trading.

The S&P 500 managed to notch its sixth month of gains in July, although volatility increased amid concerns about the economic recovery in the face of the spreading delta Covid variant. It’s the best monthly winning streak for the benchmark since 2018. The Nasdaq Composite and Dow Jones Industrial Average added about 1.2% and 1.3%, respectively, in July, while the broad S&P 500 gained close to 2.3% last month.

The U.S. is averaging more than 72,000 new Covid cases a day the last 7 days, according to the latest CDC shows, levels not seen since February this year. However, stocks still traded near all-time highs last week even as concerns about the delta variant grew.

“At the end of the day, the stock market is driven by two things: 1) Earnings and 2) Multiples and until COVID (or China) begins to negatively impact one or both of those metrics, stocks can stay resilient,’ Tom Essaye, founder of Sevens Report, said in a note.

Concerns about inflation also plagued the market, however a key inflation indicator showed lesser-than-feared price pressures on Friday. The core personal consumption expenditures price index rose 3.5% in June year-over-year. It marked a sharp acceleration in inflation, but came in slightly below a Dow Jones forecast of a 3.6% jump.

Also on Friday, U.S. second-quarter gross domestic product accelerated 6.5% on an annualized basis, considerably less than the 8.4% rate of growth expected by economists polled by Dow Jones.

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On the earnings front, Amazon sank nearly 7.6% Friday after the tech giant reported its first quarterly revenue miss in three years and gave weaker guidance. 

But an overall strong earnings season continues to be a tailwind for the market. So far, 88% of S&P 500 companies that have reported have topped EPS estimates, according to FactSet. For the second quarter, the S&P 500 is on track to post earnings growth of 85.1%, which would be the best growth rate since 2009, according to FactSet.

The first trading day of August comes with more big earnings on the way. Lyft, Amgen, Uber, CVS Health, General Motors, Roku and Square all report quarterly results this week.

Square shares sank in premarket trading after Jack Dorsey’s payment company announced a $29 billion all-stock deal to buy Australian installment loan provider Afterpay. Square was off by 4%.

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Entertainment

Greatest New Thriller and Thriller Books of August 2021

Best New Mystery and Thriller Books of August 2021

Whether you want to read on the beach or stay cool indoors, this August is filled with captivating mysteries and thrillers that will keep you guessing all the way to the last page. This month’s must-read selection includes books by debut authors and established favorites alike. From Megan Collins’ story of what happens when a murder visits a family obsessed with true crime, to Zoje Stage’s story of a nightmarish journey through the Grand Canyon, these novels are jam-packed with all the twists and turns, suspense, and memorable characters you can imagine can only wish. But in case you manage to read through all 14 of these August thrillers and mysteries, don’t forget to check out the July List too.

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Health

Dr. Scott Gottlieb says the Covid delta spike could peak in late August

Vaccine ramp up probably not enough to manage UK virus variant

Dr. Scott Gottlieb told CNBC on Thursday the current spike in Covid infections due to the highly contagious delta variant may be over sooner than many experts believe.

However, the former FDA chief urged Americans to take precautions in the meantime as delta, first found in India, takes hold as the dominant variant in the U.S.

“I think the bottom line is we’re going to see continued growth, at least in the next three to four weeks. There’s going to be a peak sometime probably around late August, early September,” Gottlieb said on “Squawk Box.” “I happen to believe that we’re further into this delta wave than we’re measuring so this may be over sooner than we think. But we don’t really know because we’re not doing a lot of testing now either.”

There may be another small bump in infection rates as schools reopen in the fall and become “vectors of transmission” as they did with the B.1.1.7 variant, first discovered in Britain, and now called alpha, said Gottlieb, who led the Food and Drug Administration from 2017 to 2019 during Donald Trump’s presidency.

Gottlieb also warned that just wearing masks, particularly cloth masks, may not enough to prevent Covid infections from the delta variant in classrooms. He advised schools to create pods, space out children in the classroom, avoid group meals and suspend certain large activities, as well as improve air filtration and quality levels. 

“There might be other things you do that actually achieve more risk reduction than the masks in the setting of a much more contagious variant where we know there’s going to be spread even with masks,” Gottlieb said. “If we’re going to tell people to wear masks, I do think we need to start educating people better about quality of masks and the differences in terms of the reduction and risk you’re achieving with different kinds of masks.”

For businesses wanting to bring people back into offices, Gottlieb said that October may be a more “prudent” time than September.

Gottlieb, who serves on the board of Covid vaccine maker Pfizer, said the critical question right now is how likely vaccinated people are to transmit the virus if they become infected. He said the Centers for Disease Control and Prevention should be collecting that data because it’s likely the current delta variant may be the newer, more permanent form of coronavirus going forward.

“When you’re dealing with a new variant where the virus levels that you achieve early in the course of your infection are thousandfold the original strain, it’s possible that you’re shedding more virus and you could be more contagious,” he said.

Local officials across the country are advising and reimposing indoor mask mandates as the highly transmissible delta variant causes Covid cases and deaths to increase again in the U.S., particularly in largely unvaccinated communities.

Nearly 162 million people in the U.S. are fully vaccinated — almost 49% of the nation’s population — even as the rate of daily administered shots has seen a sharp dip in recent months, according to a CDC tracker.

The CDC eased its Covid guidelines on masks for fully vaccinated people on May 13.

Since delta has taken a stronger hold, however, health experts are cautioning people to again use masks and follow public health measures. White House chief medical advisor Dr. Anthony Fauci told CNBC on Wednesday that even fully vaccinated people may want to consider wearing masks indoors as a protective measure against the delta variant.

Last week, Gottlieb told CNBC that he believes the U.S. is “vastly underestimating” the number of Covid delta infections, particularly among vaccinated people with mild symptoms, making it harder to understand if the variant is causing higher-than-expected hospitalization and death rates. 

“The endgame here was always going to be a final wave of infection,” Gottlieb told CNBC on Thursday. “We had anticipated that this summer would be relatively quiet and we’d have a surge of infections in the fall with B.1.1.7, and that would be sort of the final wave of the pandemic phase of this virus and we would enter a more endemic phase where this virus just becomes a fact of life and it circulates at a certain level.”

But unlike the early last year, he added, “We have therapeutics and vaccines to deal with it, we’re better at treating it and it becomes sort of like a second flu.”

Disclosure: Scott Gottlieb is a CNBC contributor and is a member of the boards of Pfizer, genetic testing start-up Tempus, health-care tech company Aetion and biotech company Illumina. He also serves as co-chair of Norwegian Cruise Line Holdings’ and Royal Caribbean’s “Healthy Sail Panel.”