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August Employment Preview

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by Calculated Risk on 9/01/2022 02:52:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for August. The consensus is for 280,000 jobs added, and for the unemployment rate to be unchanged at 3.5%.There were 528,000 jobs added in July, and the unemployment rate was at 3.5%.Click on graph for larger image.

o First, as of July there 32 thousand more jobs than in February 2020 (the month before the pandemic).

This graph shows the job losses from the start of the employment recession, in percentage terms. As of July 2022, all of the jobs have returned.

This doesn’t include the preliminary benchmark revision that showed there were 462 thousand more jobs than originally reported in March 2022.

o ADP Report: The ADP employment report showed 132,000 private sector jobs were added in September. This is the first release of ADP’s new methodology, and this suggests a weaker than expected employment report.

o ISM Surveys: Note that the ISM services are diffusion indexes based on the number of firms hiring (not the number of hires). The ISM(R) manufacturing employment index increased in August to 54.2%, up from 49.9% last month. This would suggest about 5,000 jobs added in manufacturing.

The ISM(R) services employment index has not yet been released.

o Unemployment Claims: The weekly claims report showed an increase in the number of initial unemployment claims during the reference week (includes the 12th of the month) from 261,000 in July to 245,000 in August. This would usually suggest fewer layoffs in August than in July. In general, weekly claims were lower than expectations in August.

o COVID: As far as the pandemic, the number of daily cases during the reference week in August was around 115,000, down from 125,000 in July.
o Conclusion: The consensus is for job growth to slow to 280,000 jobs added in August. The ADP report was weaker than expected, but weekly claims were a positive. It seems likely hiring will be at or below the consensus forecast.

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