September 4, 2020 Headlines

Treasury yields are higher and steeper following the release of an encouraging jobs report for August. S&P 500 futures were negative ahead of the report but have now turned positive ahead of the open. Nonfarm payrolls added 1.371 million jobs in August, slightly above expectations, but the big headline item was the decline in the unemployment rate to 8.4% (9.8% expected), down from 10.2% the prior month. The unemployment rate decline was for the right reasons as well, including increases in both household employment (+3.7 million) and the official labor force (+1 million). The wage data was also positive. Average hourly earnings were up 0.4% month over month (+0% expected), and the average work week increased to 34.6 hours.

We’ve now recovered roughly half of the job losses from the pandemic, which is sooner than many economists expected (including Fed forecasts).  At the same time, there is still a lot of noise in the data in this environment, and there is some concern that the September jobs report may give back some of this positive momentum considering the lack of additional fiscal aid from Congress, including extinguished PPP funds.

Jason Haley
Chief Investment Officer

Date Event Survey Actual Prior Revised
9/4/20 Two-Month Payroll Net Revision -39k
9/4/20 Change in Nonfarm Payrolls 1350k 1371k 1763k 1734k
9/4/20 Change in Private Payrolls 1325k 1027k 1462k 1481k
9/4/20 Change in Manufact. Payrolls 65k 29k 26k 41k
9/4/20 Unemployment Rate 9.80% 8.40% 10.20%
9/4/20 Average Hourly Earnings MoM 0.00% 0.40% 0.20% 0.10%
9/4/20 Average Hourly Earnings YoY 4.50% 4.70% 4.80% 4.70%
9/4/20 Average Weekly Hours All Employees 34.5 34.6 34.5
9/4/20 Labor Force Participation Rate 61.80% 61.70% 61.40%
9/4/20 Underemployment Rate 14.20% 16.50%



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