What's going on?
Our congratulations to the US, whose ongoing efforts to induce labor were a resounding success last month: its economy welcomed a bouncing 1.4 million jobs into the world (tweet this).
What does this mean?
The US jobs market kept its eye on the prize in August, with even more businesses bringing back even more laid-off workers. That brings the overall unemployment rate – which fell by a higher-than-expected 2 percentage points – down to 8.4%, lower than the peak rate of the recession that followed the 2008 financial crisis.
But the US still has a lot of work to do: there are 11 million more unemployed Americans now than there were before the coronavirus outbreak. And with a whole host of major companies like American Airlines, United Airlines, and Bed Bath & Beyond recently announcing big job cuts, it might be a while before things go back to the way they used to be.
Why should I care?
The bigger picture: “We don’t negotiate with economists.”
The US economy as a whole might be recovering from pandemic-induced shutdowns, but its treasury secretary reckons certain parts of it – like the services and travel industries, along with small businesses – urgently need a boost in the form of Congress-approved stimulus measures. Don’t hold your breath, Mr. Secretary: negotiations haven’t moved an inch since the last round broke up in deadlock almost a month ago.
For markets: Tech, tech, tech… kaboom?
A healthy labor market is one thing, but the health of the US stock market is a different story entirely. Tech stocks – which have powered the US stock market to record highs recently – suffered a nasty setback last week, and the tech-dominated Nasdaq 100 index fell 5% on Thursday. Fortunately, some analysts actually think that’s a good thing for the overall market: tech stocks’ valuations were starting to look pretty lofty and arguably overdue for a pullback.