Crypto News: Economics Daily: US jobs

I'm Chris Anstey, a senior editor for economic policy in Boston and today we're looking at mixed signals from the US job market. Send us feedback and tips to ecodaily@bloomberg.net or get in touch on X (formerly known as Twitter) via @economics. And if you aren't yet signed up to receive this newsletter, you can do so here.

China's factory activity sparks hope that the slump is bottoming out.
Euro-zone inflation gauges hold above 5% before key ECB meeting.
Fed's Bostic urges caution to avoid inflicting unnecessary pain.

On the eve of Labor Day weekend comes the latest monthly labor report, one of the last major inputs for the Federal Reserve's policy decision next month. And the evidence is mounting that the job market is turning.

After the past two payroll releases showed weaker-than-expected gains, a number of indicators have added to signs of softness:

Companies added a net 177,000 workers in August, the fewest since March, the ADP Research Institute reported Wednesday.
US job openings fell in July to a more than two-year low, a government release showed Tuesday.
Economists are projecting an increase in US payrolls of roughly 170,000 for August, which would mark the smallest gain since 2020.

Friday's report may be even weaker than advertised, thanks to potential data distortions due to the strikes that have hit the US film industry, and by the bankruptcy of trucking company Yellow.

Whether this turn is toward a soft or hard landing remains in question. But some are taking heart things are different this time around. While economic downturns were historically preceded by contractions in temporary-help employment — and that category has seen six straight monthly declines — industry veterans are counseling against panic.

Rather than presaging a broad economic slump, executives say the pullback in hiring may instead represent a gradual cooling of an overheated job market, Rich Miller and Michael Sasso report here.

Declines in temporary work aren't always a clear indicator of a coming recession, says Stacy McCoy at Georgia-based staffing agency EmployBridge. Employment in the sector dipped in 2019 even as unemployment continued to fall. That's much like today, she says.

And the softening in the staffing industry may indeed be a by-product of a solid underlying job market that's yielding plenty of full-time jobs.

While the temporary-help industry has lost about 205,000 jobs since the industry's peak in March 2022, most of those people now appear to be in permanent, full-time roles, McCoy says.

"I'm hearing more optimism as we navigate through the third quarter," said Richard Wahlquist, chief executive officer of American Staffing Association, which represents 1,700 temporary staffing and recruiting agencies in an industry with annual sales of more than $150 billion. "It doesn't feel like we're on the precipice of a decline" in the economy.

The US economy made more limited progress in the second quarter than initially estimated. Meanwhile, Turkey's economy slowed less than predicted in the period.
India received the lowest August rains since at least 1901, prompting concerns about weaker crop output and the potential for more export restrictions following the South Asian nation's curbs on rice.
The US just handed its corn-exporting crown to Brazil — and it's unlikely to ever get it back.
South Korea's factory output fell again in July to reach its longest stretch of declines in decades.
The Bank of England's chief economist said he preferred a "Table Mountain" profile for UK rates where they remain moderately high for some time rather than escalating rapidly and then dropping quickly.
Mexico's central bank hasn't yet reached the point to start discussing a reduction in its key rate.

The proportion of people either working or looking for work has yet to return to pre-pandemic levels in the US, and economists aren't expecting any change in the August number due out with Friday's jobs report. But in one sub-section of the population, the ratio has hit a record high.

Women in the "prime age" for work (25 to 54) have a labor-force participation rate of 77.8%, well above the overall rate that's still sub-63%. Analysis by Lauren Bauer and Sarah Yu Wang at the Brookings Institution's Hamilton Project shows that it's women whose youngest child is below age 5 that are "powering the pack's upward trajectory."

"There are likely many causes" for this, the duo wrote in a study posted Wednesday. Among the likely developments is greater opportunity for working remotely, they wrote.

The data show "women with young children who hold at least a BA as well as those who are married have made the most striking gains in pre-pandemic labor force participation," and are among the most likely to be teleworking, they said.