The beat on the Jobs Report wasn’t enough to fix the mood on Wall Street last week. The markets initially cheered the Jobs Report on Friday, as the government’s report showed 315,000 jobs added in August versus the 300,000 expected.
However, Hourly Earnings dropped slightly and the Unemployment Rate increased from 3.5% to 3.7%, which caused equities to finish lower for the 3rd consecutive week. The report also showed that full-time jobs have declined while part-time jobs have increased and multiple job holders has hit a record high. The primary reason for having more than one job? Simple - the ability to put food on the table. According to the August report, credit cart debt in U.S. households surged by 13% in the 2nd quarter—the largest increase since 1999.
The much anticipated ADP report on private payrolls was met with confusion. The company had suspended the June & July reports at the company sought to retool the methodology.
The primary complaint had been a discrepancy between the ADP report and the government’s report over the last several months. Well, August’s report showed only 132,000 jobs added in August versus the government’s report of +315,000. Mortgage Applications declined for the 3rd consecutive week and has been lower in 11 of the past 16 weeks. Factory Orders in July dropped by 1% - the largest monthly decline since the pandemic began. Could this be an indication that the U.S. consumer demand is slowing? With multiple Fed speakers this week, trading might be choppy this week depending on their comments. Fed Futures still show at least a 60% chance that a 75 basis point rate hike is still in the cards later this month.