The overall unemployment rate did fall slightly in August, from 4.3% to 4.2%. But this was due solely to the wiping out of temporary unemployment in July due to weather conditions (which had largely accounted for the sharp rise in the overall unemployment rate in July).
By contrast, the unemployment rate excluding temporary layoffs, historically less volatile, continues to rise, reaching 3.7% (vs. 3.6% in July), its highest level since August 2017.
The underemployment rate is also rising, to 7.9%, while the composition of the labor market between full-time and part-time jobs continues to deteriorate.
In addition, NFP figures are below expectations, figures for the last two months have been revised sharply downwards, and the number of job-creating subsectors continues to fall…
In short, this report confirms that we are not yet at the point where the US employment market can/will crack, as the markets had begun to fear after the July figure, but there is no doubt that the risk continues to rise.
Time is running out, but US employment will remain – and rightly so – the main cause for concern in the months ahead.
