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Another weak U.S. jobs report may be ahead, JPM data suggests By Reuters


© Reuters. FILEPHOTO: On July 17th, a help-wanted sign was posted on a Solana Beach taco truck, California. REUTERS/Mike Blake/File Photo

By Dan Burns

(Reuters) – A JPMorgan model that came closer than virtually all other forecasts in predicting last month’s big U.S. employment report shortfall is pointing to another weak jobs number for September as consumers appear to have dialed back their travel and leisure spending since Labor Day.

According to the JPMorgan’s quantitative research team and a variety of other data such as Chase credit card use and volume at airport security checks, September will see 333,000 job gains. That would be far from the kind of rebound from August’s disappointing job growth of just 235,000 – the lowest total since January – that policymakers at the Federal Reserve and elsewhere are hoping for.

The JPMorgan research group had predicted that 353,000 jobs would be created in August, according to the Labor Department’s September non-farm payrolls reports. This was less than the 80 predictions in Reuters’ poll of economists, which had a median of 728,000. It also was below half of JPMorgan Chase’s 625,000 payrolls increase forecast.

According to data from Chase credit cards, the most recent estimate by the quant team is almost a quarter of a million lower than it was two weeks earlier. It tracks a decline in consumer spending on restaurants and airline travel, which can be attributed to the model’s use of Chase credit card usage data.

Other data suggests that recent weakness has been revealed that indicates that the spread of Delta’s coronavirus may be dampening economic activity. This follows a surge in economic activity in spring and early Summer, which was largely due to COVID-19 and an underlying fall in infections. The United States averaged nearly 150,000 new infections a day in the last week, according to a Reuters tracker, roughly 10 times the volume from early July.

According to Homebase Payroll Tracking, the average number of small business employees fell 8 weeks in a row for the week ending September 12, according to a sampling of approximately 50,000 businesses.

According to the Transportation Security Administration figures, travelers who cleared airport security checkpoints over the weekend were able to clear 72% less than the average level for 2019. This is the lowest figure since June.

The apparent lull comes as Fed officials convene their next monetary policy meeting on Tuesday and are expected to rejoin their ongoing debate over when and how to reduce the emergency support measures they put in place roughly 18 months ago, starting with a likely reduction in their asset purchases later this year.

In their statement after the July meeting officials stated that they had made “progress towards” their goal of maximum employment and an inflation rate that is 2% per year. They will need to decide whether or not they agree to amend that statement in order for them show they think more has been achieved in light of recent data and case disappointments.

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