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MNI: St. Louis Fed Model Sees Loss of 818k Jobs in September

MNI (Washington)

Real-time analysis of Homebase scheduling data predicts weak hiring this month.

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U.S. hiring in September "could be weak or even negative" in September, according to a St. Louis Fed analysis of real-time employment data from the scheduling software company Homebase, showing a seasonally-adjusted decline of 818,000 jobs, a St. Louis Fed economist told MNI.

The model forecasts changes in employment as measured by the BLS's household survey, which tracks closely the headline payrolls figures from the BLS's establishment survey. A smaller drop of 500,000 jobs was forecast by the model without seasonal adjustment, the worst since January.

"Employment gains could be weak or even negative this month due to the surge in Covid cases over the last few weeks in the U.S. and around the world, which may impact the U.S. due to supply chain disruptions," St. Louis Fed economist Max Dvorkin told MNI.

There's still "a lot of uncertainty around these figures," but the model has tracked actual CPS employment "quite well" through the summer, he said.

A dismal September jobs report could disrupt the Fed's plans to begin winding down its USD120 million monthly asset purchase program in November.

For August, the model predicted a small drop in employment, not seasonally adjusted, and a gain on a seasonally adjusted basis, Dvorkin said. The BLS reported a disappointing 235,000 jobs added in August, following increases of 1.1 million in July and 962,000 in June. The Fed bank model predicted an increase of 880,000 for July and 1.5 million for June.