Daily Economics Outlook: 4th September 2015

Today's US labour market report for August will  receive more attention than usual from markets given ongoing uncertainty over whether the FOMC will decide to raise its policy interest rates at its September meeting. In the statement following the July meeting, the FOMC noted that it wished to see "some further improvement" in the labour market before it starts to tighten policy, and the subsequent July report was solid. Today's report will be the last before the September meeting and the Committee will want to see more evidence that employment growth is strong enough to lead to further decline in unemployment, says Lloyds Bank.  

Other indicators suggest that the US labour market has continued to tighten, notes Lloyds Bank. However, it is worth noting a tendency for the initial payroll estimate for August to surprise on the downside in recent years, then subsequently for it to be revised up significantly. This cautions against reading too much into a weak payrolls figure, although that may be still be enough to deter the FOMC from an early move given ongoing volatility in financial markets.

Today also sees the start of the G20 meeting of finance ministers and central bankers. The IMF has already cautioned against early Fed action and it is likely that other officials will use this opportunity to put pressure on Fed Chair Yellen and her colleagues. Meanwhile, Richmond Fed President Lacker, who is a voter on FOMC policy this year and who is generally viewed as being at the hawkish end of the policy spectrum is set to give a talk entitled "The case against further delay".