Preview of all the numbers that matter ahead of the August 2015 non-farm payrolls employment report:
The US employment report is due at 8:30 am ET on Friday, September 4, 2015
- Median NFP estimate 217k (205k Private)
- July 215k
- Highest estimate 253k (JPMorgan)
- Lowest estimate 170k (Deutsche Bank)
- Average estimate 212k
- Standard deviation 23k
- Unemployment rate exp 5.2% vs 5.3% prior
- Participation rate exp 62.7% unch
- Avg hourly earnings m/m exp 0.2% vs 0.2% prior
- Avg hourly earnings m/m exp 2.1% y/y vs 2.1% prior
- Avg weekly hours exp 34.5 vs 34.6 prior
Here's the August jobs story so far
- ADP 190K vs 177k prior (exp 200k)
- ISM manufacturing employment 51.2 vs 52.7 prior
- ISM non-manufacturing employment 56.0 vs 59.6 prior
- Initial jobless claims 4 wk avg 275.5 vs 268k prior (for July NFP survey date)
- Consumer confidence jobs hard to get 21.9 vs 27.4 prior
- Conference board help wanted online demand for hiring +34.2k vs +83.7k prior
- Challenger layoffs 41.2k vs 105.7k prior
- June JOLTS 5249k vs 5350k prior
The scariest part of all these numbers is that the low estimate of 170K is from Joe Lavorgna and Deutsche Bank. That guy is an all-world Pollyanna and when he's the most bearish guy out there, it's time to worry.
Ashraf Laidi also notes that over the past 14 Augusts, nonfarm payrolls have surprised to the downside 11 times.
What really matters in this report:
The main metrics in terms of ADP and the ISM reports are pointing to slower employment growth so I have a bias towards the downside and selling USD/JPY ahead of the data. That said, I think the jobs headlines are only a kneejerk story.
The underlying momentum after the report will be driven by the wage data. Whether jobs miss by 50K won't change the Fed's overall assessment of the economy but what's really puzzling them is the lack of wage growth.
This is probably the most disturbing post-crisis chart.
Until wages truly start to accelerate, there won't be any sustained tightening from the Fed (and maybe no tightening at all).
