The August employment jinx continues

August has been a very tough--and often revised--month for employment over the last few years.

Robert Johnson, CFA 6 September, 2014 | 6:00PM
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For so much news, equity markets barely budged this week, with small gains in the United States and slightly better gains in Europe. As the Russian-Ukraine situation calmed, the safe haven status of U.S. bonds lost some of its cachet, and rates moved higher. Emerging markets were a beneficiary of reduced risk, showing some of the best equity gains of the week. Conversely, easing tensions helped push commodities down by almost 2%.

Except for odd employment report for August, other U.S. data was unabashedly bullish. Auto sales had their best month since 2006 and shellacked expectations. Construction spending was up sharply, and weekly shopping centre data was surprisingly strong, too. Purchasing manager data for both services and manufacturing were also surprisingly strong and extended multimonth runs.

Even the news on the employment front wasn't all bad, as Challenger Gray layoff data, weekly unemployment claims data, and the ADP employment report all showed far better results than the official government report released Friday. The strong U.S. data probably contributed to the sharp move back in interest rates this week to 2.46% from 2.35% a week ago.

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Robert Johnson, CFA

Robert Johnson, CFA  Robert Johnson, CFA, is director of economic analysis for Morningstar.

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