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: ‘The Delta wave clearly knocked down hiring’ — economists react to disappointing August jobs report

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The August jobs report on Friday showed the U.S. economy added a weaker-than-anticipated 235,000 jobs last month, with the unemployment rate falling to 5.2% from 5.4%.

Economists surveyed by The Wall Street Journal had expected a gain of 720,00 jobs and unemployment at 5.2%.

See: U.S. adds just 235,000 jobs in August as delta dents hiring

Below are some initial reactions from analysts and economists, as U.S. stock futures
ES00,
+0.06%

lost ground in the wake of the data on nonfarm payrolls.

• “The Delta wave clearly knocked down hiring in August, with the number of people unable to work because their employer was hit by the pandemic rising by 400,000. Also, hiring in leisure and hospitality reversed, likely because fewer Americans are frequenting bars and restaurants. Even if the Delta wave peaks in September, as many experts believe, that still means we are likely to see a weak jobs report for this month as well.” — Robert Frick, corporate economist at Navy Federal Credit Union, in a note

• “This disappointing report will make it a closer call than we expected for a September tapering announcement from the Fed.” — Katherine Judge, economist at CIBC, in a note

• “This may be below our expectations, but an unemployment rate falling by two-tenths of a percent, that would normally be a huge amount of progress. Wage growth of this magnitude, continued job growth — so this is not the blockbuster progress we saw in July, but the economy’s still moving in the right direction. It’s nothing like last year, with the dramatic moves in the wrong direction.” — Jason Furman, Harvard professor and former Obama administration economist, speaking on CNBC

• “Even allowing for the fact that first estimates for August often disappoint on the downside, the extent of the slowdown in jobs growth all-but rules out any tapering announcement at this month’s FOMC meeting and, if this weakness persists, then it could be pushed into early next year. … The drop-off in high contact services employment growth suggests that, even though few States have re-imposed restrictions beyond mask mandates, the Delta variant is nevertheless weighing on activity by scaring off customers.” — Paul Ashworth, chief U.S. economist at Capital Economics

• “It is fairly obvious that the miss was due to very disappointing job growth in the leisure & hospitality sector. This is the sector that is most closely tied with the ‘reopening’ theme, and it generated zero jobs.” — Aneta Markowska and Thomas Simons, economists at Jefferies, in a note

• “235k is not what we need, but its still growth, we haven’t seen the economy start going in the wrong direction. Its important to not overreact or panic. This is an unwelcome bump on the road to recovery, but it is just a bump.” — Adam Ozimek, chief economist at freelancing platform Upwork, in a tweet

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