Big Jobs Miss Muddles Picture for Economy and the Fed
The unemployment report for August provides ample ammunition for divergent interpretations.
Mixed signals.
Photographer: Olivier Douliery/AFP/Getty Images
The highly anticipated U.S. jobs report for August should make us feel sorry for those having to navigate through the flood of economic data, be they analysts or, more importantly, policy makers. With another set of data subject to divergent interpretations, the post-pandemic economic landscape remains both puzzling and uncertain.
Let’s start with the main takeaways:
Some of these indicators can be reconciled by incorporating the impact of the Covid-19 delta variant on the service sector, especially given the disappointing employment numbers for retail, leisure and hospitality. Others, including the headline job creation number, can be treated as temporary “noise” in light of a still solid multi-month average. But the data also give room for more structural and secular explanations that point to the risk of a more difficult outlook.