The Day at a Glance | September 3 2021

The Top

*Employment in the US disappoints during August (235 thousand vs 732 thousand e.).

*Consumer confidence in Mexico recedes for a second consecutive month (42.7).

*Concerns of inflation on behalf of legislators halts the approval of Biden`s 3.5 trillion dollar spending package.

*The ECB is expected to cut its purchasing program as the recovery continues; its inflationary forecasts are expected to increase next week.

*Prime Minister of Japan Yoshihide Suga announces he will resign due to his failure to contain the virus and protect the economy.

Economic environment

Job creation slows down in the US. The most recent employment figures in the United States disappointed greatly during August by recording 235 new jobs during the month (vs 732 thousand e.), the lowest figure in the last 7 months. However, June (1.1M) and July`s (962 thousand) figures were revised upwards. Unemployment decreased to 5.2% and the participation rate remained unchanged at 61.7%. The creation of jobs was mostly seen in professional and business services (74 thousand), architectural and engineering services (19 thousand) and computer systems (10 thousand), which suggests that the sectors that were most affected by the pandemic stopped logging important progress, which could be related to the spread of the new virus in the country. On a positive note, the report shows that the recovery in employment is widespread in the economy and doesn’t only depend on the recovery of the most affected sectors. Regarding wages, the figures seen in the last few months suggest that growing demand for workers in the recovering sectors has caused wages to increase. In August, average hourly wages logged a 4.3% annual rise (0.6% monthly), exceeding estimates (4%e. y/y; 0.3%e. m/m). The data made public this morning suggests that the FED could move forward with monetary normalization gradually and slowly, which has slightly weakened the dollar in markets. However, the recovery remains in place with a more balanced number of jobs created, while salary figures start to raise concerns of increasing inflation.