U.S. non-farm payrolls to have rebounded in August, jobless rate likely dropped to 3.8 pct

Non-farm payrolls data for the month of U.S. is set to be released tomorrow. According to a TD Economics research report, payrolls is likely to have rebounded by 190k in August as the prior moderation in services unwinds. Strong growth is expected to have been supported by strength in goods-producing jobs, consistent with ISM job indicators.

Nevertheless, August payrolls tends to underperform ADP as well as consensus expectations. Hence, a strong +200k print is expected. On the back of the strong trend in payrolls, the jobless rate is expected to have dropped back to previous lows of 3.8 percent, stated TD Economics.

Meanwhile, average hourly earnings are likely to have risen 0.2 percent sequentially, keeping the year-on-year rate at 2.78 percent.

“The reference week (with the 12th of the month landing on a Sunday) im­plies a weak m/m point though also a wide dispersion (-0.1 percent to 0.4 percent). Given that the prior July increase was relatively strong (0.3 percent), we are biased toward a rela­tively modest August rise”, added TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -136.968. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex