September 3, 2021 Headlines

Treasury yields are higher and steeper following a big miss in the August payrolls report, but markets are expected to be less liquid today ahead of the long holiday weekend. Nonfarm payrolls added 235,000 jobs in August, well below the 733,000 expected job gains and the smallest monthly increase in payrolls in seven months. On the positive side, the prior two months were revised higher by a total of 134,000 jobs, and after the revisions, job growth averaged just over 1 million per month in June and July. Average hourly earnings rose 0.6% in August, double the expected growth rate, and the average work week held steady at 34.7 hours (34.8 expected). In the household survey, the headline unemployment rate fell another 20 bps to 5.2%, as expected and helped by a 509,000 increase in household employment.

There doesn’t seem to be a good answer for today’s miss in the early market reaction (i.e., a head scratcher), but regardless of the driver of the August weakness, it probably does provide some ammo for the doves of the FOMC that are in no rush to announce tapering. As such, the post-jobs sell-off in Treasuries is related to “lower for longer” speculation as it relates to Fed policy (and inflation).  As always, one report is not a trend, and we wouldn’t read too much into the market reaction on a day like this (Friday before Labor Day).  

Jason Haley
Chief Investment Officer

08/30/21Pending Home Sales MoM0.30%-1.80%-1.90%-2.00%
8/30/2021Pending Home Sales NSA YoY-8.80%-9.50%-3.30%-3.50%
08/30/21Dallas Fed Manf. Activity23927.3
08/31/21FHFA House Price Index MoM1.90%1.60%1.70%1.80%
08/31/21House Price Purchase Index QoQ4.90%3.50%3.90%
08/31/21S&P CoreLogic CS 20-City MoM SA1.80%1.77%1.81%
08/31/21S&P CoreLogic CS 20-City YoY NSA18.60%19.08%16.99%17.14%
08/31/21S&P CoreLogic CS US HPI YoY NSA18.61%16.61%16.78%
08/31/21MNI Chicago PMI6866.873.4
08/31/21Conf. Board Consumer Confidence123113.8129.1125.1
08/31/21Conf. Board Present Situation147.3160.3157.2
08/31/21Conf. Board Expectations91.4108.4103.8
09/01/21MBA Mortgage Applications-2.40%1.60%
09/01/21ADP Employment Change625k374k330k326k
09/01/21Markit US Manufacturing PMI61.261.161.2
09/01/21Construction Spending MoM0.20%0.30%0.10%0.00%
09/01/21ISM Manufacturing58.559.959.5
09/01/21ISM Prices Paid8479.485.7
09/01/21ISM New Orders6166.764.9
09/01/21ISM Employment4952.9
09/01/21Wards Total Vehicle Sales14.45m13.06m14.75m
09/02/21Challenger Job Cuts YoY-86.40%-92.80%
09/02/21Initial Jobless Claims345k340k353k354k
09/02/21Continuing Claims2808k2748k2862k2908k
09/02/21Nonfarm Productivity2.50%2.10%2.30%
09/02/21Unit Labor Costs0.90%1.30%1.00%
09/02/21Trade Balance-$70.9b-$70.1b-$75.7b-$73.2b
09/02/21Langer Consumer Comfort58.257.2
09/02/21Factory Orders0.30%0.40%1.50%
09/02/21Factory Orders Ex Trans0.50%0.80%1.40%1.50%
09/02/21Durable Goods Orders-0.10%-0.10%-0.10%
09/02/21Durables Ex Transportation0.70%0.80%0.70%
09/02/21Cap Goods Orders Nondef Ex Air0.00%0.10%0.00%
09/02/21Cap Goods Ship Nondef Ex Air0.90%1.00%
09/03/21Change in Nonfarm Payrolls733k235k943k1053k
09/03/21Two-Month Payroll Net Revision134k
09/03/21Change in Private Payrolls610k243k703k798k
09/03/21Change in Manufact. Payrolls25k37k27k52k
09/03/21Unemployment Rate5.20%5.20%5.40%
09/03/21Average Hourly Earnings MoM0.30%0.60%0.40%
09/03/21Average Hourly Earnings YoY3.90%4.30%4.00%4.10%
09/03/21Average Weekly Hours All Employees34.834.734.834.7
09/03/21Labor Force Participation Rate61.80%61.70%61.70%
09/03/21Underemployment Rate8.80%9.20%
09/03/21Markit US Services PMI55.255.2
09/03/21Markit US Composite PMI55.4
09/03/21ISM Services Index61.664.1


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