After Thursday Selloff And In-Line Jobs Report, Eyes On Tech Sector, “Reopening” Stocks

Right on the money.

That’s how you can sum up today’s payrolls report from the Department of Labor, which showed job growth of 1.4 million in August.  While down from around 1.7 million in July, the headline figure was exactly in line with Wall Street’s estimates. 

The data appeared to provide some early support to the major indices. Maybe some of yesterday’s heavy selling reflected people worrying about a possible bad number. Growth of 1.4 million is strong by historic standards and suggests the economy continues to recover from the crisis, but there’s definitely been a slide over the last few months. Growth was more than 4 million in June. 

What’s really surprising is the unemployment rate falling from double digits all the way down to 8.4%, something few if anyone had expected. An increase in government hiring for census workers might have played into that. Also, the number of

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August jobs up an inline 1.37M; unemployment rate falls all the way to 8.4%

August nonfarm payrolls: +1.371M vs. +1.400M consensus and 1.734M in July (revised from +1.763M).

Total nonfarm payroll is 11.5M below the February level.

Unemployment rate: 8.4% vs. 9.8% consensus, 10.2% prior.

Average hourly earnings rise 0.4% M/M vs. estimate of -0.1%.

Regarding fiscal policy, the better than expected report will mean less pressure to provide another stimulus package, according to economist Christophe Barraud.

And on the monetary policy side, there’s less pressure on the Fed to change its forward guidance soon, he said.

Labor force participation rate increased by 0.3 percentage points to 61.7% in August; that’s still 1.7 pp below its February level.

“These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it,” the Bureau of Labor Statistics said.

Increase in government employment reflects temporary hiring for the 2020 Census.

Excluding

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