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U.S. adds nearly 1.8 million jobs in July, and three market experts break down what’s next

Stocks were trading lower on Friday even after a blowout jobs report.

The U.S. economy added nearly 1.8 million jobs in July, more than anticipated.

Three market experts break down what to watch next.

Nada Eissa, former deputy assistant secretary of the Treasury for Economic Policy, sees concern about a prolonged economic recovery. 

“The numbers are better than expected. I’m surprised and pleasantly so, but I will say one thing that I’m concerned about for the rest of the year is that we’ve already had a series of reopening and closings, and I think one of the potential consequences of that is that the next time around when we do get control of the second spread is that businesses and consumers aren’t going to be as willing to jump back in as quickly. And so, the concern with that is that the separations, the expense separations between workers and owners, you extend the duration of recovery. And so, my concern is … that we moved from what is a purely health crisis that had economic consequences to one in which even when we solve the health crises, we still have a problem at the other end.”

Kate Moore, head of thematic strategy for BlackRock’s Global Allocation investment team, sees a broader change in employment. 

“A lot of people who got jobs were temporarily laid off and were rehired by their previous employer. The big question I have for the second half of 2020, and in fact for the first half of 2021, is going to be, what decisions are companies making about the structure of their labor force? This remote working environment is shedding some light on what is necessary, what is most efficient, where the greatest productivity lies. And I think people are going to really use this pandemic opportunity to streamline the cost structure again.”

Jim Cramer, host of CNBC’s “Mad Money,” says the downside to better-than-expected numbers is the potential for a delay in more stimulus. 

“My fear is that this may make it so that the negotiators for the package drag things out because things are better than expected. So it looks like you could make the case, ‘Well, let’s be more considered about this.’ That would be bad because this number does not include a lot of reclosing [imput]. … The biggest increase line item was bars, bars and restaurants, and we know that that backfired. So I think that it’s really important to keep the fire to the feet of these Congress people.”


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