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Morning Brief: Unemployment down and pay up, as Delta variant stalls growth

Javier David breaks down Tuesday’s Morning Brief, which details the stale August jobs to report that saw dismal numbers due to growing concerns surrounding the Delta variant and the silver linings as the economy sees a decline in unemployment rates and an increase in workers wages.

Video Transcript

JARED BLIKRE: But we begin now with the Morning Brief, and for that, we're going to bring in Yahoo Finance's Javier David. Javier, thanks for joining us.

And I was reading your notes this morning, and you're keying off some of the data that we got Friday from the payrolls numbers, that job report, and also combining some of the other data, and it looks like we're slowing down a little bit. The consumer isn't quite spending as much.

JAVIER DAVID: Yeah, I think the headline here is obviously the Delta variant, as it has been with just about every other data point that we've seen over the last several weeks. Hiring, as I highlighted in the Morning Brief, isn't as bad as it seems. The good news is the unemployment rate did tick down. And, most importantly perhaps, employers are still continuing to shell out money in order to retain and hire talent. So you're seeing paychecks continue to gain.

But I think the big headline here is the slowdown, the fact that hiring did disappoint. There are a couple of reasons for that. A, as I've mentioned in the Brief, companies or consumers, rather, are a bit scared off from going into public places like restaurants, like bars, like movies, and are warier of being around other people for fear that they may contract the virus.

And the other thing here that should not be discounted is the labor crunch. We've talked a lot about this. Workers or employers are still having a really difficult time trying to hire workers, and it's created a situation in which they've almost sort of hit a wall in terms of how much-- how many new jobs they can create without having necessary workers to fill the demand that they have already.

BRIAN SOZZI: And, Javier, you know, just putting a finer point on this too, it's Goldman Sachs out this morning cutting its GDP growth forecast, highlighting some of the things you just mentioned too. Consumer spending appears to have slowed down across the board.

But, look, you track a lot of this economic data. Where have the good points been? Really for the past month and a half, it has been a steady drumbeat of missed estimates, slow and slowing growth.

JAVIER DAVID: Yeah, slowing growth doesn't necessarily mean stagnant growth. It certainly doesn't mean a downturn. So while we are coming off of the highs that we saw earlier in the year, I think two points can't be stressed enough. We don't have the fiscal boost that we had from stimulus checks and so forth. We're still waiting the final word or the final [INAUDIBLE] of the infrastructure bill, which will give the economy another round of sort of fiscal stimulus, as it were.

But that was some of what we saw earlier this year was always going to peter out. I think Wall Street had already sort of come around to the conclusion that that wasn't necessarily sustainable. So while we're slowing down from what is admittedly an extremely high level, it doesn't necessarily mean a downturn.

So Goldman Sachs was kind of the first out of the gate to say, OK, we probably need to curb a little bit of our enthusiasm in terms of what we're expecting for growth this year for the remainder of the year. But, you know, that's a far cry from saying the economy's going to hit the skids all over again.

JARED BLIKRE: And, Javier, I did hear you. I think I heard you say curb your enthusiasm. It brought some HBO memories back for me.

Javier David, thank you for joining us.

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