August's Jobs report had a chance to put the final "nail in the coffin" that the sudden rise in interest rates was justifiable, and the Fed would begin Tapering later this month. Today's report could put that notion to a screeching halt. 169,000 new Non-Farm Payroll jobs were created in August. Slightly less than the expected 180k. This is not too far off from consensus, but lets look into the report a little bit deeper. July's jobs report was revised WAY down from 162k to 104k, and June's report of 188k was revised down from 188k to 172k. These downward revisions are go against the Fed's stance that the US economy is growing at modest pace and comfortable with higher interest rates.
63.2% Labor Force Participation Rate is the lowest we have seen since August 1978!! That means nearly 1/3 of the US isn't working, and those will not be buying houses, buying cars, buying retail; not contributing to the main catalysts that drive economic growth!!
Investors are trying to spin a few "positives" from the report that the Unemployment rate ticked down to 7.3%; but that number is skewed based on how many people that are just not looking for jobs! 866,000 discouraged workers in August, which is on the same pace as last year. Discouraged workers are people not currently looking for jobs because they believe no jobs are available for them.
August Jobs report paints a lackluster picture of the jobs recovery over the summer and path back to prosperity is still in the distance.
