A glimpse on U.S. Non-farm Payrolls

As U.S. NFP is scheduled to be released on Friday, we expect positive labor market momentum to continue in August, with the economy adding another 226K jobs following a decent 215K gain last month. With payroll gains set to exceed 200K for a 4th straight month (6 out of 8 months in 2015), reinforcing the current positive nar­rative on labor market activity. A number of employment indicators continue to point toward sustained labor market progress in the coming months, with the layoff side of the labor equation performing particularly well as jobless claims hover near cycle lows.

The gains in employment are expected to be broadly-based, with the pro-cyclical manufacturing, construction and retail sectors expected to add jobs at a fairly decent clip. Public sector employment should also rise during the month, adding a further 15K jobs to the 211K rise in private sector employment. Despite this, unemployment rate should keep unchanged at 5.3%. Wage growth should rise another 0.2% in August as weekly hours remain flat at 34.6. In the coming months, we expect labor market momentum to remain strong, reflecting the accelera­tion in overall economic growth performance.