The key economic report of the week will be the US official employment report on Friday. Market consensus point to an increase in payrolls by 285K; analysts at Wells Fargo forecast a larger increase by 325K in August.
“July’s employment report was a blowout, with nonfarm payrolls increasing 528K despite consensus expectations for “just” a 250K gain. Job growth was broad-based across most industries, and revisions to employment over the prior two months were mildly positive. However, the report likely still caused some indigestion for members of the FOMC. Wage growth came in stronger than expected, and the labor force participation rate fell by a tenth of a percentage point, putting it three-tenths of a percentage point below its March 2022 level.”
“Job growth of more than half a million new jobs per month is consistent with an economy that is experiencing robust economic growth. Yet, other indicators suggest the economy is slowing down, and monetary policymakers are charting a course that bring labor supply and demand more into balance. As a result, we would be surprised by job growth continuing anywhere near the July pace in the months ahead. We look for nonfarm payrolls to have risen 325K in August.”