US Firms Add Just 29,000 Jobs, Unemployment Rate Ticks Up: Instant Reaction

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This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world.

John Tucker (0:19)

Let's get right to it. Big changes here, change in non-farm payrolls. We're expecting 90,000 jobs. We're only getting 29,000. The prior month also revised downward from 162,000 to 133,000.

The unemployment rate rising to 4.2%. The expectation was 4.1%.

Average hourly earnings on a month-over-month basis are coming in much less than expected, just a tenth of a percent. The expectation was for three-tenths of a percent. You mentioned that two-year yield down eight basis points right now. 4.7%. Let me check the markets for you all day long, right here on Bloomberg Radio. I'm John Tucker. That's your unemployment report, the jobs report for this Friday. Paul and Tom.

Tom Keene (1:11)

John Tucker, thanks so much. 4.2% on the unemployment rate. There's a lot of noise in there. I got a C- on this. Dr. Sahm marked me down years ago.

Paul Sweeney (1:19)

Yeah, understandable.

Tom Keene (1:20)

It's 4.2% here. And everything, folks, as they said, it was a real stasis survey, and the answers, the numbers are not. 29,000 in the two-month payroll revision is negative 60,000. I'm going to nail this. That's a negative 29,000. Okay.

Negative over, you know, a summation here as well. The hourly earnings come in light, light, light, 0.3, and they came in substantially below that, 0.1.

Average hourly earnings, you know, annualized down a tick, 3.1, down to 3.0. Equities lift up 61 on futures, up 30, double up 60 NASDAQ up a full stick, 1%, and the VIX, as Paul mentioned, it's 16, comes in at 15 Paul, to let Dr. Sahm massage the data, what do you see here, Paul, right now?

Paul Sweeney (2:20)

I'm just going to get the bond market right here, Tom. The two years, down nine basis points. It was down two basis points before this report. So we're now at 469 on the two year, the 10 year, off about 8.5 basis points. The 10 year is now at 5.15%, Tom. So yields coming in, bonds prices higher.

Tom Keene (2:38)

In Duluth, Minnesota, think Gordon Lightfoot in Lake Superior. Claudia Sahm is with us. She is honored by the University of Minnesota. Dr. Sahm, this is a report that a select group of people said would happen, would come in light, what David Rosenberg called a catch down. What do you do with one month data?

Claudia Sahm (2:58)

Well, I think this does undercut the story that had been coming in today, that maybe we have some strengthening in the labor market, right? Maybe the hiring, picking up some. This just shows, no, the labor market is much more stable. Job creation has stabilized relative to last year when it was really sliding, but we are not in an uptrend, right? So the August number, it was pop, even with the downward revisions today, it's probably well above what it takes to keep the unemployment rate stable.

But we didn't get another month of that, right? It popped back down. So I think we're just in this place of very low job creation in the US, which does fit with low growth in the labor force and the unemployment rate. It did tick up, but basically it's unchanged. I think 4241, those aren't big difference.

Tom Keene (3:42)

I was talking to Veronica Clark about this at Citigroup, and the GDP, and I guess it comes into Claudia.

I'm thinking of the late Laureate Ned Phelps at Columbia, the dynamism of the American economy. Are we getting sclerotic in our non-AI world?

Claudia Sahm (4:02)

Well, it is really frustrating to look at the labor market at a moment like this, where there really isn't a lot of dynamism. One thing I watched so closely, in addition to the hiring rate, is the quit rate, because that's the opportunity for people to go find better jobs, better pay, deal with higher prices, and that quit rate is also low. We are just not moving people around, so there's so much tension to have a labor market that feels stuck, and an economy where we're talking about transformative technology, things are out of sync in a way that just doesn't feel like it can keep going, and yet it has. We are at least three years into this low-hire, low-fire labor market. This is not normal.

Paul Sweeney (4:43)

How do you think the Fed is going to view this print here this morning?

Claudia Sahm (4:46)

I don't think this gives the Fed a lot of information. I don't think it will really change what their approach to monetary policy. Right now, they're trying to contain supply-driven inflation, like keeping a bad situation from getting worse.