Colossal jobs report may tip the scales for the Fed?
The August Non-Farm Payroll report will be released tomorrow at 8:30 ET (12:30 GMT, 1:30pm BST), with expectations centered on a headline print of 217,000 after last month’s as-expected 215,000 reading. My model suggests that the report could meet these expectations, with leading indicators suggesting an August headline NFP reading of 213,000.
The model has been historically reliable, showing a correlation coefficient of 0.90 with the unrevised NFP headline figure dating back to 2001 (1.0 would show a perfect 100% correlation). As always, readers should note that past results are not necessarily indicative of future results.
Source: Bureau of Labor Statistics, FOREX.com
Relative to last month, most leading indicators for the non-farm payrolls report have deteriorated slightly. The lone bright (or maybe “modestly glowing”) spot this month was the ADP employment report, which edged up from an initial estimate of 185k last month to 190k this month. Meanwhile, both the Manufacturing and Non-Manufacturing PMI employment readings edged lower, to 51.2 and 56.0, respectively, though they both continue to show growth. Finally, initial jobless claims in the survey week came in at 277k, above last month’s historically low 255k reading, but still at a very low level, indicating relatively few new unemployed Americans.