The last two employment reports have been very strong, bolstering consumer confidence and giving the economy some momentum as the summer wore on. Meanwhile, the Delta variant continues to grow providing trepidation concerning the future of the economy as the year wears on. Released on Friday, the August jobs report was not likely influenced much by the surge in COVID cases.
The increase of 235,000 jobs was seen as a significant disappointment, but the decrease in the unemployment rate to 5.2% was viewed as a positive. The previous two months of job gains were revised upward by 134,000 as well. Overall, the report was seen as falling short of expectations and the gain in hourly earnings added to inflationary concerns. It did not answer the question as to how much affect the latest surge in cases will have as the year rolls on.
That answer will take some time. Meanwhile, some market analysts are already pulling back on their predictions for strong economic growth during the second half of the year. The economy is not expected to contract, but the growth numbers are not expected to match the relatively hot numbers of the first half. The August jobs report could have just been a pause, or a start of this trend.