From Real Time Economics:
Economists and others weigh in on the unchanged nonfarm payrolls number and steady 9.1% unemployment rate.
–The stagnation in payroll employment is an ominous sign. The monthly gain in payrolls has now been below 100,000 for four consecutive months and the unemployment rate has been stuck at around 9% since the start of the year. –Paul Ashworth, Capital Economics– Disturbing. There is no other way to describe the August employment report. The economy added exactly zero jobs over the month, the first time that precise number has occurred since World War II. Worse, the totals for both June and July were revised downward sharply. Indeed, if August is also downgraded we could see a negative number. The details were as distressing as the headline number. You have to back out the roughly 45,000 Verizon strikers who didn’t appear on the payrolls. They are back and will boost the September job numbers but even if they were working, the gain would have been disappointing. Except for health care few areas posted increases. –Naroff Economic Advisors–Not exactly the ideal way to start off the Labor Day holiday. Even though there were a host of one-time item impairing August’s results — fears of a government shutdown, strikes, and back-to-school seasonal factors being the most prominent — it’s hard to find any silver lining to this month’s dark cloud. The private sector payrolls increase of 17,000 was easily the worst in eighteen months. –Guy LeBas, Janney Montgomery Scott–What is particularly “bad” is the earnings data. We often say that the economy could create a trillion jobs each month but if nobody is earning any money, consumer spending is going nowhere. In August, average hourly earnings fell by 3 cents to $23.09. While this follows a decent gain in July, the year-over-year change in earnings is just 1.9%, a terribly weak rate of wage growth. Further, average weekly hours fell by one tenth. This is not good… Irrespective of any “one offs” that are skewing the data, job creation is the lifeblood of an economy — not necessarily equity prices. Without it, people should really cease acting surprised that consumers aren’t spending a ton of money, think we’re still in a recession and find their confidence falling through the floor.–Dan Greenhaus, BTIG LLC