NFP: Recovery in the labor market remains intact, but the pace is slowing – Wells Fargo
|The official employment report was released on Friday with number above expectations. According to analysts at Wells Fargo, the labor market’s recovery remains intact but they warn that with the pace of re-openings slowing in recent weeks, however, further gains will be more incremental and a full recovery is years away.
Key Quotes:
“Across the private sector, job growth eased up broadly, but most major industries continued to chip away at earlier job losses. That suggests a broader hit to employment beyond the industries most immediately impacted by social distancing efforts has not manifested in a material way, at least not yet.”
“Despite another sizeable increase in jobs in July, nonfarm payrolls have yet to recover even half of the jobs lost since February. Payrolls remain 12.9 million below pre-pandemic levels, a bigger hole than at even the worst point in the aftermath of the Great Recession. Additional gains will be slower-going.”
“Today’s payroll data are already a bit stale with figures capturing the week of July 12-18. Since then, initial jobless claims have been little changed. At the same time, other high frequency readings on the labor market suggest a notable slowdown in the pace of activity. The initial bounce from widespread re-openings is now behind us. Further improvement will occur in fits and starts and depends on the course of the virus.”
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