The employment data for August received a lot of attention from the market. Although the number of new jobs last month was only 142,000, it was still close to the 165,000 analysts had predicted. In specifically, following the 4.3% scare in July, the unemployment rate went back to 4.2%.
This data, which is virtually as predicted but better than anticipated, depicts a softening but not drastically worsening labor market. This provides investors with the much-needed comfort following this week's JOLT statistics and the employment report from July.
It was not surprising that the employment figure for July was revised downward after many downward revisions this year. Investor relief was somewhat diminished, though, by the correction from 114,000 to 89,000 units, which was already a low number.
Investors are still holding out hope that the Fed can arrange a gentle landing for the economy, averting a recession and lowering inflation as the economy continues to grow. Following Chairman Powell's lead during his Jackson Hole address, the Fed should be free to drop rates by 25 basis points at its September meeting in light of the latest inflation statistics and the employment report.
The job market has definitely slowed in recent months, but there are still some long-term bullish drivers in place. The economy's danger of entering a recession has not increased in light of today's jobs data, which will maintain strong profit growth in the S&P 500 for the remainder of the year. The Fed is getting ready to drop rates for the first time this cycle, since inflation is down.
In the meanwhile, OPEC+ declared that eight of its members will prolong voluntary production cutbacks for a further two months, putting an end to long-running speculations in the oil business. The recent drop in oil prices, which has alarmed producers and unsettled the market, prompted this move. OPEC+ is attempting to stabilize prices with this action in the hopes that producers would once again profit from demand.