U.S. nonfarm payroll employment likely moderated in August, jobless rate to have remained stable – TD Economics

The U.S. nonfarm payroll employment is expected to have moderated in August. According to a TD Economics research report, the nonfarm payroll employment is likely to have slowed to 175k pace after recording a strong gain of 209k in July. The past trend in survey and hard data indicators indicate towards job growth and well above its breakeven rate of about 100k.

A small slowdown led by private services is expected to have slowed a bit in August. Also, mining jobs are likely to have contracted, in line with the decline in rig counts. Manufacturing jobs are likely to keep a stable rate of growth near 10k.

The U.S. jobless rate is expected to have remained the same at 4.3 percent, with risks balanced as further improvement in labor participation cannot be excluded in the near term, stated TD Economics.

“On wages, we expect a 0.2% m/m increase, taking in account unfavorable calendar effects that bias the monthly gain downward”, said TD Economics.

The rise is expected to leave average hourly earnings a bit higher on a year-on-year basis to 2.6 percent. In all, the combination of strong job growth and a rebound in wage gains argues for a hawkish report, though the market response is expected to be tempered by worries of low inflation and near-term political risks, added TD Economics.

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