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.
The jobs tracker created by the bank’s quantitative research team, fed by a range of alternative data including Chase credit card usage and airport security check volumes, suggests that September job growth will come in at 333,000. 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.
Ahead of the August non-farm payrolls report from the Labor Department released Sept. 3, the JPMorgan research team’s model had estimated 353,000 new jobs would be added that month. That was lower than all 80 forecasts in a Reuters poll of economists that sported a median expectation of 728,000, as well as about half the 625,000 payrolls gain forecast by other economists at JPMorgan Chase.
The latest estimate from the quant team’s model is down by nearly a quarter million from two weeks ago, and tracks a drop-off in consumer outlays on things like airline travel and restaurants, based on Chase credit card usage data.
That dovetails with recent weakness that has surfaced in other data suggesting the spread of the Delta variant of the coronavirus is damping a range of economic activity that had surged through the spring and early summer on the back of COVID-19 vaccinations and what was then a substantial 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.
Payroll tracking firm Homebase, for instance, showed the number of people working at small businesses fell for the eighth consecutive week for the period ending Sept. 12, based on a sample of around 50,000 establishments.
Figures from the Transportation Security Administration, meanwhile, showed that travelers clearing airport checkpoints in the past weekend fell to 72% of the 2019 level on a seven-day average basis, the lowest since mid-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.
At their July meeting, officials said in their post-meeting statement that the economy had “made progress toward” their goals of maximum employment and inflation that averages 2% over time. A key question confronting them over the next two days will be whether they can agree on amending that statement to indicate they believe more progress has been made in the face of the latest surge in cases and data disappointments.
Reporting by Dan Burns; Additional reporting by Howard Schneider; Editing by Andrea Ricci
