Did August Non-Farm Payrolls Increase Concerns about US Economy?
August non-farm payroll
The August non-farm payroll report indicated weaker improvement in the US labor market (SPY) (VFINX) as compared to July 2017. August non-farm payrolls stood at 156,000 as compared to 209,000 jobs in July. The figure didn’t meet the market expectations of 180,000.
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Key highlights of the jobs report
- The health care (XLV) sector added 20,000 jobs in August.
- The professional and business services sector added 22,000 jobs in August.
- The food services space added 9,000 jobs.
- The manufacturing sector added 56,000 jobs, and the construction sector added 28,000 during the month.
Impact on the economy
Both in July and August 2017, non-farm payrolls posted weaker figures. The declining non-farm payroll figure is increasing concern about the US economy (QQQ) (SPY). Strong labor market conditions are important for economic growth.
In the previous part of this series, we saw that the US economy saw a 3% annualized growth rate in 2Q17. Higher consumer spending contributed to this growth. If the labor market and wage growth don’t improve at a higher rate, then it could badly hamper consumer spending, which is a major backbone of the US GDP.
In the next part of this series, we’ll analyze US consumer confidence in August 2017.