First Friday

NFP Numbers


Unemployment rateAnd the numbers are numbers are better than expected, which, when combined with stubbornly inflation numbers, makes it likely that the Fed will raise rates at its next meeting.

What can you do? ¯\_(ツ)_/¯

The U.S. added 162,000 jobs in August, the Labor Department reported Friday, a much-stronger-than-expected result that suggested the labor market shook off its early-summer doldrums. 

The numbers

The unemployment rate stayed steady at 4.1%. That leaves it at a historically low level that indicates the labor market remains generally healthy.

Economists polled by The Wall Street Journal had forecast the report would show the economy gained just 53,000 jobs. The unemployment rate was in line with their expectations.

What this means for jobs

The jump in jobs came in part from rebounds in restaurant and in local-education employment that many economists viewed as one-off factors. But the U.S. has added an average of 80,000 jobs a month so far this year, which compares with monthly growth of 10,000 jobs in 2025.

“We don’t have a problem in the labor market,” said Joe Brusuelas, chief economist at RSM.

Hiring had weakened considerably in June and July, and so the August job gains helped dispel concerns that the labor market had re-entered a period of cooling.


Still, workers’ pay has been lagging behind inflation, raising concerns that consumer spending could be challenged in the months ahead.

………

Average hourly earnings rose 3.1% from a year earlier, indicating that pay continues to struggle to keep up with inflation. Consumer prices were up 3.4% from a year earlier in July. Because people’s inflation-adjusted, or real, wages are close to zero, their ability to spend is getting challenged, said EY-Parthenon chief economist Gregory Daco.

In the middle of all this, it looks like private equity is heading for a major crackup, as they cannot unload the properties that they have looted.

Retail stalwarts Saks and Eddie Bauer filed for bankruptcy. Kmart and JoAnn Fabrics are gone for good, a trail of layoffs and disappointed customers in their wake. Hospital giant Steward Health Care collapsed, costing thousands of jobs and leaving several communities without a local hospital.

These once-trusted US companies have one thing in common: they were owned by private equity investors, who load companies with debt when they buy them and squeeze out profits as they restructure.

The business model is now facing an existential crisis that may have profound ramifications across the US.

………

But this wave of buyouts is running smack into a wall of persistently high interest rates, rising buyout prices and pressure over moribund returns.

Private equity funds are sitting on a “record number of unsold companies, many of which they’ve been unable to sell … or at least unable to sell at the prices that they’re looking for”, said Jim Baker, the executive director of the Private Equity Stakeholder Project, an industry watchdog.

The end of low interest rates are hitting them hard.

Good, though there will be some short term gain.