Labor Day, Jobs, Rates and 9/11.
It’s Labor Day. So, let’s talk labor.
- And labor equals jobs. Speaking of jobs…
- Economists were expecting the employment report to show 53,000 new jobs, after showing a decrease of 23,000 an increase of 21,000 in July. Yep, the July numbers were revised up, as were the June numbers.
o It came in at 162,000. Wow. That’s wonderful bad news – I’ll get to that.
o In 2025, the average monthly job gain was 10,000. This year, it has been 80,000 a month.
§ There isn’t a job problem; unemployment stayed at 4.1%.
· Unless you are trying to get one; that seems harder than usual. Consequently, folks are hanging on to their jobs; some are even (gasp) going to the office to keep them.
§ We have an interest rate problem – still getting to that.
o Worker pay rose 3.1%. That’s not keeping pace with 3.4% inflation.
§ That may impact spending.
§ Oh, by the way, consumer savings were up. Nice. Back to jobs…
o Food services and drinking places had an increase of 59,000 after losing 17,000 over the summer.
o Local government education gained 42,000 jobs.
o Construction was up 22,000 with a focus on non-residential construction; data centers and factory construction were behind those numbers.
o Manufacturing was up 16,000, with hiring focused on machinery manufacturing and fabricated metal products.
There was no shortage of data this week, but it was mostly marginally different from the previous period. The outlook for services was up slightly, and the outlook for manufacturing was down slightly; neither materially so. Yes, you are reading the holiday weekend version of the Russell Report.
The Impact of the Jobs Report: the bad news of the good news.
- The jobs report discussed above had the most impact on the week. Why?
- It increased the odds of a rate increase in the September 15-16 Fed meeting, and again by the end of the year.
o So, if you are doing your budgeting and you have an adjustable-rate loan, such as a line of credit that is tied to the bank’s prime rate, you should probably plan on a 0.5% rate increase over what you have now for 2027.
§ That also goes for a lot of home equity lines of credit too.
- Keep an eye on the Consumer Price Index report that comes out on Friday, 9/11.
o And speaking of 9/11…
25 years ago, this week… September 11, 2001
- Many of us remember where we were when we first heard the news. I was in a coffee shop in La Verne looking at the TV behind the counter. My initial reaction was that a pilot in a Cessna had a heart attack and just flew into the building. I mean, what else could it be??!!
o Can’t be more mistaken than that.
o I also didn’t fly up to headquarters that day. It turns out no one flew for 48 hours.
- I mention this because it’s important that we don’t forget the impact that day had on the country, the sacrifices made by the police and firefighters, and the impact on the 2,753 people in New York, the 184 people at the Pentagon, and the 40 passengers and crew who crashed in Shanksville, Pennsylvania. And their families, including a member of our parish who was killed in the Pentagon.
- Last year, my wife and I were in New York and signed up for the 9/11 Memorial & Museum tour. It is exceptional. I cannot convey the impact it has on you; you just have to see it yourself. You can easily spend the day in the museum and above ground at the memorial; I also recommend going to the top of One World Trade Center.
- Every time you fly commercial, you should be reminded of 9/11. It’s the reason we have TSA checkpoints, and we have been going through them for 25 years.
- Never Forget.
Today is Labor Day! Some facts about Labor Day:
It became a federal holiday in 1894. It was promoted, not surprisingly, by the Central Labor Union and the Knights of Labor.
Oregon was the first state to make it an official public holiday.
It marks the unofficial end of summer. It doesn’t mean it gets cooler; it just means everyone is back at school, and your commute just took a little longer.
I think of Labor Day as kind of a Memorial Day for the folks that built this country using their bare hands or designing it with a slide rule way before the creation of the $395 HP35 calculator in 1972. I think of my parents and their parents, who put in 40 years with the same company or raised their children, or both. The occupation doesn’t matter: truck driver, soldier, engineer, office clerk, factory worker, attorney, steel mill worker, cook, server, manager, housekeeper, and yes, banker. What does matter is that they worked every day at a job (or two or three) that they were good at, with little fanfare. If they couldn’t pay cash, they didn’t buy it. They did it to support their families and put food on the table, and they left the world a better place because of it.
On this Labor Day, I ask that you honor the folks who, through their labor, put you where you are today. Whether they are your parents, grandparents, aunts and uncles, a mentor, or whoever, it was their effort that created a base that helped get you where you are today. Now that’s worth a Labor Day toast and a cold one on a three-day weekend.
Make it so.
