U.S. Experiencing Lowest Projected Private Payrolls In Seven Years
Current U.S. payroll forecasts mirror that of when hurricanes devastated the country in 2017, which temporarily closed businesses, and in 2013 when there was a federal government shutdown, according to Bloomberg.
Wall Street economists are increasingly citing the trade war and manufacturing recession as the factors beginning to permeate the economy. The combination pushed down the median estimate for private payrolls to a gain of just 130,000 last month, the weakest projection in seven years, excluding months affected by events such as natural disasters or the shutdown.
Investor expectations that the Federal Reserve will cut interest rates for the third straight meeting will be heightened if a reading is weaker than predicted. Fed officials will be forced to reassess the labor market, which they’ve previously labeled as “strong”, if this is the case.
While a separate Labor Department report showed filings for unemployment benefits had increased to a four-week high, they continue to remain historically low.
Yet, the recent job numbers suggest that employers are either having difficulty filling positions, are hiring fewer people due to lower demand, or a combination of the two.
“The economy is losing momentum in the back half of the year to a degree sufficient to meaningfully depress the pace of hiring. Job creation has already decelerated markedly, and diminished business confidence in recent months will exacerbate the defensive posturing among hiring managers,” said Bloomberg economists Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby, and Eliza Winger.