S&P futures hand over in unstable buying and selling after disappointing job studies

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, USA on Monday, August 23, 2021.

Michael Nagel | Bloomberg | Getty Images

US stock futures gave up their gains early Friday morning after the August job report fell below expectations.

Dow futures were down 14 points. S&P 500 futures were unchanged and Nasdaq 100 futures rose less than 0.1%.

The number of employees outside the agricultural sector rose by 235,000 in August, the Ministry of Labor said on Friday. Economists surveyed by Down Jones reckoned 720,000 jobs. The report marks a significant slowdown from the July revised 1.053 million figure.

The projections for the report are wide ranging, from around 300,000 to 1 million. Federal Reserve Chairman Jerome Powell has stressed the need for stronger employment data before the central bank abandons its massive bond buying program, and the disappointing report could change expectations of when the Fed will begin its tapering process.

“A surprisingly low number of jobs this morning tarnishes the prospects for reducing the decline significantly, as only 235,000 jobs were created in August, which is likely to give the Fed a break and move ahead with its plans to announce its plans to cut bonds,” Chris said Zaccarelli, chief investment officer of the Independent Advisor Alliance, said in a note. “A lot of people believed that the Fed would announce its taper plans at the FOMC meeting this month, and that is no longer likely.”

The central bank will also look to see if the report suggests that Covid has affected attitudes and activity. The virus variant has been a wild card for the economy, and its impact could be a factor influencing the Fed as it considers taking the first step away from easing policies.

Jason Furman, who served as chairman of the Council of Economic Advisors under President Barack Obama, said in the Squawk Box that fears of the Delta variant of Covid-19 may have hit the labor market recovery in the short term.

“We stand ready to add many jobs in the months ahead as people either overcome their fear of the Delta, the Delta virus begins to decline, or the time begins to fix all of this,” Furman said.

On Thursday, the S&P 500 and Nasdaq rose to new records on better-than-expected jobless claims data. Initial unemployment insurance claims fell to their lowest level since March 2020.

The S&P 500 rose 0.3% to hit its 54th record high in 2021. The tech-heavy Nasdaq Composite rose 0.14% to close at an all-time high. The Dow Jones Industrial Average rose 131 points, or 0.4%.

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The S&P 500 and Nasdaq started September with strong feet. The S&P 500 and Nasdaq Composite are up 0.6% and 1.3% respectively this week. The Dow has been about flat since Monday.