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Good Afternoon. On this day in 1998, Google was incorporated, turning a Stanford search project into a company built around finding better answers on the internet.
Wall Street found an answer it wasn’t expecting today: U.S. employers added 162,000 jobs in August. Stocks slipped and Treasury yields rose as the hiring rebound strengthened the case for higher rates, while retailers and software companies showed why demand, margins, and cash flow can’t be judged from one headline.
—Rosie, Wyatt, Evan & Conor
💰 Markets
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🔍 Today’s Vibe
🔥 What’s Hot: 🔥
Employers with positions to fill: Restaurants and local schools helped deliver the strongest hiring month since March, and the labor market hasn’t given the Federal Reserve an easy reason to support demand with lower rates.
🥶 What’s Not: 🥶
Rate-sensitive assets and discretionary retailers: Stronger hiring lifted Treasury yields while Lululemon’s weaker sales outlook reminded investors that a resilient economy doesn’t guarantee an easy spending environment for every brand.
🔢 Big number: 162,000 — the number of jobs U.S. employers added in August. Hiring hasn’t merely recovered from July’s initial loss; the revised data now show July gained 21,000 jobs, giving policymakers less reason to treat the labor market as an emergency.
Blu Dot surpasses 2,000% ROAS with self-serve CTV ads
Home furniture brand Blu Dot blew up on CTV with help from Roku Ads Manager. Here’s how:
After a test campaign reached 211,000 households and achieved 1,010% ROAS, the brand went all in to promote its annual sales event. It removed age and income constraints to expand reach and shifted budget to custom audiences and retargeting, where intent was strongest.
The results speak for themselves. As Blu Dot increased their investment by 10x, ROAS jumped to 2,308% and more page-view conversions surpassed 50,000.
“For CTV campaigns, Roku has been a top performer,” said Claire Folkestad, Paid Media Strategist, Blu Dot. “Comping to our other platforms, we have seen really strong ROAS… and highly efficient CPMs, lower than any other CTV partner we've worked with.”
Using Roku Ads Manager, the campaign moved from a pilot to a permanent performance engine for the brand.
🇺🇸 Stateside
A help-wanted sign Photo credit
The job search returns a surprising answer
U.S. hiring accelerated in August after a weak summer, giving households a sturdier income base and the Federal Reserve a harder policy decision. A healthy labor market is welcome, but it doesn’t automatically help markets when inflation is already running above the central bank’s comfort zone.
The news: Employers added 162,000 jobs, the strongest gain since March, while unemployment held at 4.1%. Restaurants added 59,000 positions, local-government education gained 42,000, and manufacturing added 16,000. June and July were revised upward by a combined 55,000 jobs, so the rebound wasn’t limited to one favorable monthly estimate.
Big picture: The Fed’s employment concern hasn’t disappeared, but officials can now place more weight on inflation without assuming a rate increase will break the job market. Next week’s consumer-price report should matter even more because strong hiring can support spending and wages. Businesses shouldn’t expect borrowing costs to fall simply because earlier data looked weak.
Source: U.S. Bureau of Labor Statistics
Good economic news raises the rate bar
Stocks edged lower and Treasury yields rose after the jobs report changed the balance of risks facing the Fed. Investors didn’t dislike the hiring itself; they reconsidered how much room policymakers have to raise rates again while the economy continues creating jobs and inflation remains elevated.
The news: The S&P 500 was down close to 0.4%, the Dow fell roughly 0.5%, and the Nasdaq slipped near 0.3% in late-afternoon trading. The move wasn’t dramatic, but the 10-year Treasury yield rose to about 4.78%, and market expectations for a September rate increase climbed above 60% after the employment data arrived.
Bottom line: One strong report won’t decide the Fed meeting, especially with consumer prices still due next week. It does change the order of concern: inflation can return to the front while labor stress moves back. Households and companies shouldn’t build refinancing or hiring plans around a quick rate decline that the data no longer support.
Source: Associated Press
Lululemon stretches past its strongest market
Lululemon lowered its outlook as weak demand in the Americas outweighed continued international growth. The problem isn’t that the brand has stopped expanding everywhere; it’s that overseas gains still aren’t large enough to offset a sharper decline in the region that built the business.
The news: Quarterly revenue fell 4% to $2.4 billion, with comparable sales down 9%. Revenue in the Americas declined 8% while international revenue rose 4%, so the weakness wasn’t global. Management now expects full-year sales of $10.35 billion to $10.50 billion, a drop of 5% to 7%, and projected an even steeper third-quarter decline.
What’s next: Lululemon can’t solve weaker traffic with international openings alone. It needs products that restore urgency in the Americas while protecting pricing and inventory discipline. A tariff refund helped reported earnings this quarter, but that benefit won’t create repeat demand. Watch comparable sales and markdowns because the brand’s recovery has to begin with customers, not accounting help.
Source: Lululemon
Zscaler’s growth asks for more cash upfront
Zscaler finished its fiscal year with faster revenue, a larger recurring-revenue base, and a record adjusted operating margin. Yet free cash flow fell sharply because the cybersecurity company spent more on capital projects and internally developed software. Growth hasn’t weakened, but its near-term cash conversion did.
The news: Quarterly revenue rose 25% to $898.2 million, and annual recurring revenue reached $3.77 billion, also up 25%. Adjusted operating margin hit 24%, while free cash flow fell to $60.8 million from $171.9 million. The gap wasn’t small: capital spending and internal-software investment increased to $218.5 million from $78.7 million.
Big picture: Cybersecurity demand can remain durable even as the economics shift between a purchase today and cash produced tomorrow. Zscaler’s investments may support future capacity and products, but management can’t rely on revenue growth alone to prove the spending will pay off. Readers should watch free-cash-flow recovery and whether recurring growth holds after acquisition effects are removed.
Source: Zscaler
Guidewire’s cloud shift reaches the income statement
Guidewire’s transition from traditional software licenses to subscriptions is becoming visible in both growth and profit. Subscription and support revenue expanded far faster than the overall business, and operating income more than tripled. The change hasn’t only moved revenue between categories; it’s improved the company’s financial shape.
The news: Full-year revenue rose 23% to $1.48 billion, while subscription and support revenue increased 33% to $970.9 million. Annual recurring revenue reached $1.24 billion, up 19%, and operating income rose to $149.9 million from $41.1 million. Fourth-quarter subscription revenue grew 32%, so the shift isn’t losing momentum.
Bottom line: A cloud transition works when recurring revenue rises without permanently sacrificing profitability. Guidewire’s results suggest insurers are adopting the platform and the company is gaining operating discipline at the same time. It’ll still need renewals, implementation capacity, and customer expansions to sustain the pace, because subscription growth becomes more valuable when retention keeps compounding it.
Source: Guidewire
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🌎 Around The World
Berlin’s shops Photo credit
Europe’s shoppers step back in July
Retail sales weakened across Europe in July after a small June increase, with the largest pressure coming from non-food purchases. Consumers haven’t stopped spending altogether, but the mix suggests discretionary demand remains easier to postpone than groceries when budgets and borrowing costs are still under pressure.
The news: Retail volume fell 0.6% in the euro area and 0.4% across the European Union from June. The decline wasn’t uniform: food, drinks, and tobacco sales rose 0.4%, while non-food products fell 1.4% and automotive fuel declined 0.8%. Germany recorded the largest monthly drop among reporting countries at 3.4%.
What’s next: A broad retail recovery can’t depend on essential purchases alone. Merchants should plan inventory and promotions around uneven demand rather than assume lower inflation will immediately restore discretionary spending. Germany’s decline deserves attention because weakness in Europe’s largest economy can reach suppliers and neighboring markets before it becomes obvious in the region-wide average.
Source: Eurostat
Canada loses jobs without losing the plot
Canada’s employment fell in August, but unemployment stayed unchanged and manufacturing added positions. The report doesn’t describe a labor market in free fall; it shows weakness concentrated in several service and public-sector categories while one trade-sensitive part of the economy moved in the opposite direction.
The news: Employment declined by 42,000, lowering the employment rate to 60.8%, while unemployment held at 6.4%. The setback wasn’t universal: business and building-support services lost 20,000 jobs, public administration lost 8,800, and natural resources lost 7,700, while manufacturing employment increased by 22,000.
Big picture: Canada can’t treat steady unemployment as proof that the setback is harmless, because fewer employed people still mean less income and softer demand. Yet the manufacturing gain offers a useful counterpoint for companies exposed to trade and production. Watch participation, hours, and whether service-sector losses spread before assuming the headline is either a crisis or a temporary dip.
Source: Statistics Canada
Australia’s second jobs tell the bigger story
Australia added jobs in the June quarter, but the fastest growth came from secondary positions and people holding more than one job. That pattern doesn’t necessarily mean the labor market is unhealthy; it does suggest headline job counts can rise faster than the number of people whose primary employment feels sufficient.
The news: Total jobs increased 0.6% to 16.7 million, and filled jobs rose 0.7% to 16.3 million. The growth wasn’t evenly distributed: secondary jobs jumped 4.6% during the quarter and 11.7% from a year earlier, while multiple-job holders rose 6.6% for the quarter. Job vacancies declined 2.6%.
Bottom line: Policymakers can’t read job growth without asking who is working those positions and why. More secondary work can reflect flexible opportunity, higher living costs, or both, while fewer vacancies may signal that employer demand is becoming less expansive. Wage growth and household spending should show whether Australians are adding hours by choice or to keep budgets together.
Source: Australian Bureau of Statistics
🥸 Dad Joke of the Day
Q: Why did the math book look sad?
A: Because it had too many problems.
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📖 Vocab Word of the Day
Workforce planning: the process of matching staffing, skills, and schedules to expected business demand, so a company doesn’t hire too late or carry more labor than it needs.
In a sentence: August’s hiring surprise shows why workforce planning can’t rely on one weak month when demand and policy conditions can change quickly.
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