00:00U.S. employers added a far lower than expected 22,000 jobs in August.
00:05It's the latest sign of a weakening labor market and keeps alive hopes for the Federal Reserve to cut interest rates later this month.
00:12At the same time, unemployment has increased to 4.3%.
00:16Let's talk now to Matt Maley, the Chief Market Strategist at Miller Tabac and Company in Boston.
00:22Matt, welcome back. Good to see you.
00:24And what does all this data mean for a rate cut this month?
00:30Well, it definitely, Jamie, it definitely puts us firmly on the table.
00:33And the question now is whether it might be even not just 25 basis points, but a full half a point or 50 basis points.
00:42And, you know, it's a very interesting situation because, you know, the stock market here in the U.S. initially rallied quite nicely off this news.
00:52Now it's kind of rolled back over and it's moved back into negative territory because people are starting to worry about, you know, lower interest rates tend to be good for stocks.
01:00But, you know, one of the things that everybody's been talking about for a while now, if interest rates go down for the wrong, you know, the wrong reasons, and that being a weaker economy, that can create some problems.
01:11Jobs data can make for rather uncomfortable reading, as we know.
01:15You know, do you see any impact from the staff changes at the United States Statistics Office?
01:23You know, it's, you know, a lot of people are starting to wonder, you know, how good are these numbers?
01:28But you can see the most important thing is how does the market react to it?
01:32And they do.
01:33And the markets are reacting to them.
01:34They did last month as well.
01:36And I don't think that's going to have much of an impact on how we continue to react.
01:42The key is that people are worried that the economy is weakening.
01:46And, you know, with a market that's as expensive as it is, a weaker economy means weaker earnings.
01:53And that's not good for an expensive stock market.
01:55So unemployment has increased to 4.3 percent.
01:58Is that increase in the unemployment rate a cause for concern?
02:02Yes, it is, because one of the things, Jamie, that everybody's been talking about for the last year or so is that, you know, as long as the consumer can hold in there, the economy is going to be fine because, you know, the consumer is 70 percent of the U.S. economy.
02:18But the one thing that was keeping the consumer resilient was the job market.
02:23People start losing their jobs.
02:25Not only that, and people see their neighbors losing their jobs.
02:28That gets them to spend less.
02:30And so that is definitely a concern about how strong growth will be as we move through the rest of this year and into next year.
02:36There's always caution about talking about one set of figures, but let's do that anyway.
02:41What does all of this say about the wider U.S. economy?
02:45Well, again, we've seen cracks in the economy in several different areas, especially in housing, with some of these housing prices starting to come down.
02:53So if we start to see a broad weakening in the labor market, that's going to filter over into many other different areas.
03:01So, again, the linchpin behind keeping this economy strong or holding up well, even during the bear market of 2022, has been the employment level.
03:12If that starts to see bigger cracks, that creates problems.
03:16Any link here on these figures to tariffs or should we not make any connection?
03:23Well, it's hard to make that.
03:25It's hard to know for sure.
03:26We're going to have to see more data.
03:28But the thing is, you know, we've been known for we've known for a long time that this would be the time of year where we would see the impact of these tariffs.
03:37And so to dismiss them, I think, would be a mistake.
03:40So I guess my point is that, yes, it's definitely a concern.
03:44I think it is having an impact.
03:45But we're going to have to see more data in the months ahead.
03:48Matt, have a good weekend.
03:49Good to talk to you.
03:50Matt Maley, chief market strategist at Miller Tabak and Company in Boston.
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