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Weekly economic review & outlook
Slower, but still solid, job growth

OCT. 05, 2020

You Need to Know

Week in review

Rehiring activity continues to boost payroll gains

Nonfarm payrolls grew by 661,000 for September, held back by a sharp drop in government hiring, while the unemployment rate fell below 8.0 percent.

Stronger consumer confidence boosting big-ticket spending

Coinciding with a jump in confidence, sales for autos and homes continue to recover rapidly from the lockdown declines of earlier this year.

Week Ahead

Forecasts

Modest decline expected for ISM services index

The ISM services survey index is expected to slip a bit for September, while still showing expansion, consistent with a slower pace of overall economic activity heading into the fourth quarter.

Trade deficit likely to grow larger

Based mostly on the advanced estimate for trade in goods – which showed a worsening in the trade deficit for that major category – we look for an increase in the overall trade deficit for August.

Nonfarm payrolls posted their weakest gain since the start of the post-lockdown surge. Still, with 661,000 jobs added for September, the labor market continues to rapidly heal as more businesses rehire workers and slowly build up staffing. The service sector led the way once again with outsized growth within the restaurant, retail, and health care sectors. There was a substantial drop in government employment, coming from both fewer teachers than usual in the COVID-19 world and a decline in temporary Census workers, resulting in a stronger 877,000 monthly increase for the private sector. The U-3 unemployment rate fell sharply again for September, down to 7.9 percent from 8.4 percent in August.

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