U.S. job growth reportedly recorded a very disappointing market reading. Job creation for August fell far short of the targets of economists and the previous month. This is an indication that the economy has not yet fully recovered and the third quarter growth momentum will be disrupted.
The NFP data recorded a significant drop of 235,000 jobs last month after rising to 943,000 in July, according to a Department of Labor report released just now. This reading is also far off the forecast of economists who predict NFP data will add jobs by 720,000 workers.
On the other hand, the unemployment rate met expectations by falling to 5.2% from 5.4% in August. Economists, however, argue that the significant reduction in job growth is due to the growing Covid-19 outbreak in the southern part of the U.S. and some cities that are taking action to stop hiring.
So far what has been a market concern is the increase in Covid-19 infection, which is driven by the Delta variant that will increase the risk. While the impact on economic activity is likely to be modest with almost half of the population being fully vaccinated but increasing cases will encourage work from home and hinder hiring.
The US dollar index continued to plunge against major currencies to a trading level of 92.220.
