'This Is What A Soft Landing Looks Like': Economists React To August Jobs Report On X
Nonfarm payroll employment went up by 142,000 jobs in August, roughly 20,000 lower than consensus expectations and below the average monthly gain of 202,000 jobs over the previous 12 months, the Bureau of Labor Statistics reported Friday.
The unemployment rate ticked down by 10 basis points to 4.2%.
June and July payroll employment numbers were revised down by a combined 86,000 jobs.
The construction and healthcare industries led the way for the month's job gains.
Construction had the most job gains in August, adding 34,000 jobs, higher than its average of 19,000 jobs per month over the last 12 months. Healthcare added 31,000 positions, roughly half of the 60,000 jobs the industry has averaged per month over the past year.
Here's how economists and others reacted to the jobs report on X, formerly Twitter:
This is what a soft landing looks like. The economy softens, until it lands. Over the past 3 months payrolls have grown at an average rate of +116k, probably a touch below the current "breakeven" rate. This is why unemployment has drifted up a touch (tho down this month).
— Justin Wolfers (@JustinWolfers) September 6, 2024
August #jobsreport is a touch better than July but not by much: the job market is clearly cooling.
— Daniel Zhao (@DanielBZhao) September 6, 2024
-Jobs growth up to 142,000 but with downward revisions of 86,000 to June & July
-Unemp drops to 4.2%, Sahm rule remains triggered
-Avg hrly earnings growth firms to 3.8% YoY
1/
JOBS REPORT!
— Dr. Alicia Sasser Modestino (@SasserModestino) September 6, 2024
US added 142K jobs in August > 89K in July
Most jobs in construction & healthcare
UR ticked ⬇️to 4.2% with -190K temp layoffs
Wages ⬆️3.8% over year > 2.9% inflation
LFP unchanged
➡️Hiring slowing as expected
➡️Soft landing in sight
➡️Small Sept Fed rate cut@NUEcon pic.twitter.com/DxDAHFw6Jz
With that being said, this week's Job Openings and Labor Turnover Survey (JOLTS) data suggest construction job openings continue to fall from their recent peak in Feb, reflecting a cooling of overall housing starts and declining builder confidence. pic.twitter.com/hHqAvrTZjC
— Sam Williamson (@SWilliamsonEcon) September 6, 2024
The good news: The August jobs report indicates the labor market's slowdown isn't as severe as the July report showed.
— Nick Bunker (@nick_bunker) September 6, 2024
The bad news: the labor market is still slowing down
The bearish interpretation is that this report will make the Fed more comfortable with a go slow, take it easy, inertial kind of response and that raises the odds of letting things deteriorate further
— Joe Weisenthal (@TheStalwart) September 6, 2024
It would appear that futures markets agree with me on this being a coin flip between 25 and 50 bps. pic.twitter.com/TFIdEdaXVj
— Neil Irwin (@Neil_Irwin) September 6, 2024
John Williams of @NewYorkFed says it's time to "dial back the degree of restrictiveness", which he called a "natural next step" for the Fed given progress on inflation. He supports moving fed funds towards a neutral setting over time and sees the 2% target being reached next year pic.twitter.com/y2K9xFr9JC
— Colby Smith (@colbyLsmith) September 6, 2024
I am worried about the softening in employment growth relative to the strong momentum I see in labor supply (from immigration). But a 50 bps cut could telegraph unwarranted panic. So, there’d have to be some consensus so that FOMC would could start laying the groundwork now.
— Wendy Edelberg (@WendyEdelberg) September 6, 2024
My teen would say we are all locked in right now!
— Betsey Stevenson (@BetseyStevenson) September 6, 2024
High prime age labor force participation has been the sunniest part of our remarkable labor market, but I am worried about new entrants finding it harder and harder to get a job. https://t.co/Hu14EzE79M
In sum, this is a nice economy to have. The job market is chugging along nicely. Prime age employment has risen.
— Jason Furman (@jasonfurman) September 6, 2024
But policymakers should always worry about risks. With this report recession risk down a little & inflation risk up a little. But recession still the bigger risk.
