US job growth slows whilst hourly earnings see sharp rise

September 6, 2021

In our weekly Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.

Job growth in the United States slowed through the month of August but hourly earnings saw a sharp rise, almost double the expected rate.

Recording employment gains of 235,000 jobs, the month missed estimated projections of 750,000 by almost 70% with the hospitality and leisure industries virtually grinding to a halt as the Delta variant of COVID-19 tightens its hold on the country. However, whilst growth slowed, average hourly earnings saw a steep rise in comparison. Roughly doubling compared to previous estimates, hourly earnings increased by 0.6% across the month.

The jump in hourly earnings appeared to spur inflation fears and an increase in the benchmark 10-year U.S. Treasury note yield on Friday morning, leaving it modestly higher for the week.

Eurozone inflation accelerated more than forecast to 3% in August—up from 2.2% in July and well above the ECB's 2% target. Higher energy, food, and industrial goods prices drove the increase, according to the EU's statistics agency.

News of Prime Minister Yoshihide Suga’s resignation contributed to a strong rally in Japanese equities, removing some political uncertainty and raising expectations of increased economic stimulus. Gains were underpinned by Japan’s accelerating COVID-19 vaccination drive. The Nikkei 225 Index soared 5.38%, while the broader TOPIX Index rose 4.49%, reaching a 30-year high.

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