United States-110225966

1Michael Feroli (1-212) 834-5523michael.e.feroli@jpmorgan.comJPMorgan Chase Bank NAMichael S Hanson (1-212) 622-8603michael.s.hanson@jpmchase.comJPMorgan Chase Bank NAMurat Tasci (1-212) 622-0288murat.tasci@jpmchase.comJ.P. Morgan Securities LLCAbiel Reinhart (1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NANorth America Economic Research06 September 2024J P M O R G A Nlater be marked lower. Looking to the household survey, the unemployment rate retreated from 4.3% to 4.2%, though considering the un-rounded figures the decline was just 3bps. The small drop in the unemployment rate mainly stemmed from a reversal of a July spike in people unemployed because of a temporary lay-off, while the number of people unemployed for other reasons rose. Some of the upward pressure on the unemployment rate continues to stem from a solid labor supply as the sum of unemployed new entrants and re-entrants kept rising. The labor force participation rate held steady at 62.7%, and while prime-age participation did edge down 0.1%-pt it remains just shy of its all-time highs.0.40.50.60.72.93.43.94.4171819202122232425Percent of the labor force, sa, both scalesUnemployment rates by reason for unemploymentSource: BLS, J.P. MorganOn temporary layoffAll excluding temporary layoffElsewhere in the establishment survey, the workweek rebounded to 34.3 from 34.2, and average hourly earnings rose a solid 0.4%m/m (3.8%oya). Nonetheless, through the first two months of the quarter nominal labor income is expanding at a 3.9% annual rate, the softest quarter of the expansion by over a percentage point. Slower income growth could prove a headwind to consumer spending growth, which has been the engine powering the economy in recent quarters. There were also further signs that industries that have been key for recent payroll gains were slowing or or had already settled into a softer trend. Healthcare and social assistance jobs growth has moderated for the last three months straight, and the 44k gain in August was just over half the 81k/month pace in the prior year. Government employment also rose just 24k, continuing what has been a much slower pace of gains since April. Since then payroll growth has averaged just 14k/month, whereas in the year to March it was rising 55k/month. In addition to the August employment report this week brought the July JOLTS, which also showed less job market vigor. The job opening rate slid to 4.6% from 4.8% the prior month, and the ratio of openings to unemployed declined to its lowest level since early 2018. The decline in this ratio should reduce worries at the FOMC that the labor market is still too tight and further shift the focus from inflation to labor risks.•The August employment report showed ongoing mod-eration in job growth •The unemployment rate ticked down from 4.3% to 4.2% as a spike in temporary layoffs reversed•We continue to look for a 50bps cut at the September FOMC meeting, but we expect FOMC members will actively debat