Dramatics and drama
Weekly Bond Commentary
Is it a loss of 22.2 million jobs, or a gain of 10.6 million jobs? Either way you look at it, the last few months have seen dramatic changes in the labor markets.
The economy fell into a yawning chasm of job losses in March and April, after the national emergency declaration in mid-March and shutdown of schools and businesses. Since then, jobs have been added back at record levels, but the gains have been declining since peaking at 4.8 million in June. The 1.37 million increase in August, reported this week, is the fourth-largest monthly employment gain in the 80-year history of the data, following only the three previous months of 2020. These follow, of course, far and away the single worst month in history (April 2020).
So, what’s next? Congress and the administration appear to be working on a stimulus package that may include more assistance for state and local governments, but details still need to be worked out. With elections coming soon, little actual time in Washington remains for action.
And, speaking of elections, Labor Day marks the unofficial start of the fall campaign season, so we should expect to see sharpening rhetoric and little actual progress on other legislation. The Federal Reserve won't be changing much, either (especially with rates), at its next scheduled meeting on Sept. 16. But it has made clear it stands ready if needed to ensure smooth functioning of the markets.