The Dow Jones (DJIA) is slightly in the red after the labor market received two new concerning updates.
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The U.S. added 54,000 private payrolls in August, well below the expectation for 65,000 additions and falling by almost half from July’s upwardly revised figure of 106,000 from 104,000, said ADP.
Additionally, initial jobless claims for the week ended August 30 grew to 237,000 from 229,000, exceeding the estimate of 230,000.
Is the Labor Market Cracking?
Continuing jobless claims, which lags initial jobless claims by one week, edged lower to 1.940 million from 1.944 million and trailed the estimate of 1.959 million. However, continuing claims remain elevated. When paired with jobless claims rising steadily for several weeks, that could point to a slowdown in the jobs market. It doesn’t help that yesterday’s Job Openings and Labor Turnover Survey (JOLTS) showed that July’s layoffs were higher than expected at 1.808 million.
Taken together, the latest data paints a picture of the labor market under pressure. Slowing payroll growth, rising layoffs, and consistently high jobless claims suggest that cracks are beginning to form.
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