The Day at a Glance | August 30 2023

*The US economy´s growth during the 2Q23 was revised downwards slightly. 

*The US private sector recorded a larger amount of created jobs than what was expected by the analysts´ consensus during August. 

*After three consecutive months of declining figures, the number of available jobs in the US dropped below 9 million for the first time since March 2021, according to the Department of Labor Statistics. This points to a softening in the labor market. 

*The Federal Reserve of Dallas’s service sector index recorded an improvement for the third consecutive month in August, as the figure set at -2.7 points (vs -4.2 points in July). 

*Today, the Central Bank of Mexico will release its quarterly report corresponding to the April – June 2023 period.

Economic environment

Final GDP figures in the US for the 2Q23 point to an annualized quarterly growth of 2.1%. This reading set below the preliminary 2.4% figure, although it remained above the 2.0% recorded in the 1Q23. The adjustment stemmed from the downward revision in private inventory investment and non-residential fixed investment, which was partially offset by an upward revision in local government spending.

The US private sector hired 177 thousand workers during August; this figure is the lowest since March of this year and set below the expected 198 thousand. Simultaneously, the National Employment Report, which is carried out by the ADP Research Institute, logged an annual 5.9% wage increase. The services sector continued to be the main driver for jobs in the private sector, as it logged a 154 thousand figure, mainly in education and health (52 thousand), transportation and services (45 thousand), and entertainment and lodging (30 thousand). On the other hand, the goods-producing sector contributed 23 thousand new positions, led by manufacturing (12 thousand). After two years of robust increases, August´s figures point to a return to pre-pandemic levels, which seems to indicate certain weakening in the job market. However, it´ll be important to keep a close eye on these figures in the coming months, as well as the figure that the non-farm payroll will report on Friday, which is expected to have created 187 thousand positions in the US economy.