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Back to School has also become its own shopping phenomenon. In fact, the majority of parents will spend more than $100 on back to school shopping.
The jobs market remains strong, as the August nonfarm payrolls came in at a solid 1.37 million jobs created, right in line with expectations. This was the fourth consecutive month of gains, up 10.6 million over this time frame. In March and April more than 22 million jobs were lost, so we still aren’t quite to half of the jobs recovered though.

This was the second consecutive month there was a very weak ADP private payrolls number ahead of the monthly jobs report, adding to the worries, but the actual nonfarm payroll number was once again quite solid. Don’t forget, just yesterday we saw initial jobless claims come in at 881,000, the lowest number since the week ending March 14, another improving employment number.

The big surprise in today’s report though was the unemployment rate fell to 8.4%, from 10.2% last month and an expected 9.8%. This was the lowest unemployment rate since 4.4% in March.

“This was an impressive report and once again showed the economy remained quite resilient,” explained LPL Financial Chief Market Strategist Ryan Detrick. “But 8% unemployment is 8% unemployment, so let’s not get too excited, but we’ll still take this improving trend in the employment picture.”

As shown in the LPL Chart of the Day, even though more than 10 million jobs have been created in the past four months, the sad truth is we are still quite a long way from recovering all the jobs lost due to the pandemic. In fact, looking at previous cycles, it has taken years for all of the lost jobs to come back and this time doesn’t appear any different.
One thing to consider is could this solid number make it harder for Washington to agree on the next stimulus plan? We are watching this closely, but with the two sides still close to a trillion dollars apart, today’s report will likely do little to help the two sides come to a quick resolution.
Last, don’t forget that stocks gained more than 60% in less than six months, so some weakness would be perfectly normal. In fact, looking at the two previous strongest starts to a bull market ever (’82 and ’09) both saw some weakness right around now.
In Case You Missed It...
In honor of Labor Day we asked our team what the first and worst jobs were that they held. There were some fun answers that came out of this!
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Our office will remain closed due to rising concerns of COVID-19 spreading. That said we will be in the office and working, just safely with the doors closed. We look forward to having you hopefully in the office soon.
LPL 2020 Midyear Outlook: The Trail to Recovery
The LPL Research Midyear Outlook 2020: The Trail to Recovery is here to guide us on the path to economic and market recovery and what to expect in the 2020 elections.
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