Dow fell 74, decliners over advancers better than 2-1 & NAZ went up 9. The MLP index was little changed in the 182s & the REIT index dropped 4+ to the 479s. Junk bond funds did little & Treasuries were sold. Oil drifted lower & gold jumped 19 to 1831.
AMJ (Alerian MLP index tracking fund)
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US hiring slowed sharply in Aug as the resurgence in new Covid-19 infections impeded job gains. Nonfarm payrolls increased 235K workers in Aug as the
unemployment rate fell to 5.2%, the Labor Dept reported. The forecast expected the addition of 728K jobs & the unemployment rate to fall to 5.2%. The job gains in the Jul report were revised higher by 110K to 1.05M. The disappointing report
was released 2 days before the $300 per week in supplemental
unemployment benefits is set to expire. Economists are still assessing
the impact that the Child Tax Credit, which pays families up to $3600
per child per year, will have on the labor force. Notable job
gains occurred last month in professional & business services
(+74K), transportation & warehousing (+53K), private education
(+40K) & manufacturing (+37K). Employment in leisure & hospitality was unchanged following the addition of 380K jobs in Jul. Retailers lost 29K workers, with the biggest declines occurring in
food & beverage stores (-23K) & in building material & garden
supply stores (-13K). Retailers have lost 285K laborers since
Feb 2020. The labor force participation rate was unchanged at 61.7% & has been 61.4-61.7% since Jun 2020. Average
hourly earnings rose 0.6% in Aug & 4.3% year over year. Economists
anticipated a 0.3% month-over-month increase & a 4% annual gain. The
US economy has averaged 586K jobs gained per month this year. Nonfarm employment has risen 17M since Apr 2020, but is down
5.3M from prepandemic levels.
US economy adds 235,000 jobs in August, sharply missing estimate
Dr Scott Gottlieb predicted Northeastern states, including New York & Connecticut, will experience another jump in Covid cases tied to the highly transmissible delta variant. “I think there’s sort of a perception that we’re sort of through this delta wave here in the Northeast because we’ve seen delta cases go up and go down in places like the New York metropolitan region. We’re also seeing [test] positive come down,” he sa[d. “I don’t think that that was the true delta wave. I think that that was a delta warning. I think our true delta wave is going to start to build after Labor Day here in the Northeast and the northern part of the country,” added Gottlieb. The Covid delta variant hit the American South earlier than other parts of the country & now the summer infection surge there has clearly peaked, Gottlieb said. But in the Northeast, Gottlieb said he believes Labor Day weekend gatherings & kids returning to school will serve as “incubators for spread.” “Now whether we see a wave of infection as dense and severe as the South, I don’t think that’s going to be the case because we a have a lot more vaccination; we’ve had a lot of prior infection, which we also know is protective,” said Gottlieb. “But we will probably see a build in cases here in the Northeast. I don’t think that we’re done with this.”
Dr. Gottlieb says Northeast yet to see ‘true delta wave,’ another spike ahead
Treasury yields rose as investors digested a disappointing Aug jobs report. The yield on the benchmark 10-year Treasury note gained more than 3 basis points, trading near 1.329% & the yield on the 30-year Treasury bond rose 4 basis points to 1.95%. Yields move inversely to prices & 1 basis point is equal to 0.01%. Job creation for Aug was a huge disappointment, with the economy adding just 235K positions. The forecast had been looking for 720K new hires. Aug's total was the worst since Jan & comes with heightened fears of the worsening pandemic potentially detailing the economic recovery.
Treasury yields turn higher after poor August jobs report
Dow Jones Industrials
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