CU Economists React To Disappointing Jobs Numbers

NEW YORK—Last week’s disappointing employment numbers were labeled a “big jobs miss” by two economists in credit unions, who offered their thoughts on how the report might change things.

According to the federal government, just 235,000 jobs were added back to the economy in August, the lowest number since January of this year and below the expectations of most forecasters.

Nearly a year and a half into the recovery, the U.S. economy remains 5.3 million jobs short of where it was in February 2020, before Covid-19 threw a wrench into the gears, noted CNN Business.

During August, 5.6 million people said they hadn't been able to work or worked reduced hours because their employer was affected by the pandemic.

Despite the low numbers, the unemployment rate fell to 5.2% in August from 5.4%, according to the Bureau of Labor Statistics.

CUNA Response

“This report reflects the impact that the Delta variant has had on the economy,” said CUNA Senior Economist Dr. Dawit Kebede. “The lower-than-expected increase in jobs shows that workers are hesitant to re-join the labor force, even though schools are resuming in-person instruction and federal unemployment benefits will soon lapse. There is still a critical need among employers to fill vacant positions, which has led to wage increases across the country.

“The August jobs report may prompt the Federal Reserve to delay its decision to slow down its purchase of Treasury securities and mortgage-backed securities,” Kebede added.

NAFCU Response

“The August payroll report represents a large miss versus expectations,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Flat growth in leisure and hospitality employment suggests that the delta variant is taking a big bite out of the recovery. The number of people working part-time due to slack business conditions plunged by over one-million combined in June and July, but grew by 200,000 in August. The (Federal Open Market Committee) has already given a soft commitment to taper asset purchases this year, but now more than ever the emphasis will be on decoupling that process from rate hikes which are still a long way off.”