August jobs report misses with 142,000 jobs added, unemployment at 4.2%

Simone Del Rosario: The latest jobs report shows further weakening in the labor market. The US economy added 142,000 jobs in August. That’s lower than the 165,000 jobs expected. That said, the unemployment rate did tick back down to 4.2 % from 4.3 % in July. In July, when it hit that 4.3%, that’s when it triggered a recession indicator known as the Sahm Rule. Markets roiled for a bit after that jobs report. This is more in line with expectations but still shows that the job market is weakening. It still shows that we’re adding fewer and fewer jobs. And in fact, we have some significant revisions that are coming up in this latest August jobs report and that is the July jobs report which came out with 114,000 jobs added is actually being revised down to just 89,000 jobs added. In addition, June’s jobs report is being revised down by another 61,000 jobs. So we’re continuing to see systemic revisions downward on the number of jobs that are being added in the U.S. economy. The unemployment rate is sticking at around 4.2 percent. And we know that the Fed plans to cut in September after hearing from Fed Chair Jerome Powell in Jackson Hole stating that it is time for policy to adjust. As the numbers came out this morning, I spoke to Deputy Editor over at Business Insider, Bartie Scott, to help us break it all down.

Bartie Scott: I think this is a relief. This is a good report. I mean, we’re really happy that unemployment ticked back down from that 4.3% we saw last month to 4.2 now, which, again, historically, we have to remember, is a good, you know, a relatively low unemployment rate. And like you said, 142,000 jobs added is lower than the expected 165 but not that much lower. You know, I don’t think it’s a cause for alarm. A year ago, we were, we were seeing, you know, 200,000 jobs added, but we knew that that was going to slow down after sort of correcting after the pandemic and ramping back up, and this feels like a slowdown, but not, you know, a hole. We’re not falling off the edge of the labor market here.

Simone Del Rosario: Bartie, I want to bring this into like, a bigger perspective here, because we also got a major revision from the year ending in March. So you know, it takes time for these revisions to come through. But it found out that for the year ending in March, jobs added were 818,000 fewer than we had been told, than we had expected. You take the July revision down to 89,000 jobs. That looks pretty terrible you take in the fact that you know, the number of jobs added over the course of the past year and a half just keeps taking these hits. What are we supposed to make of this?

Bartie Scott: I do think that this is a cause for some concern. You know, like you said, the July report really set off alarm bells and made people worry that the labor market was slowing down. And it turns out that maybe that slowdown started earlier than we actually knew. And in some ways, maybe that’s a good thing that people haven’t been shocked by the jobs report over and over, because we did see the stock market go down. People really start to worry. And. We know that these kinds of reports can sometimes, like, create some some fear, and of course, we don’t want that, but it is an indication that the Fed really, again, the Fed really has to step in at this point. It’s under some pressure that maybe it has waited too long, and I think those numbers potentially back that up. You know, it’s the interest rate hikes and keeping them steady for nearly a year has really slowed down the labor market. And yeah, and those numbers are showing us that maybe it’s it started before we knew, and it’s slower than we knew.