US job creation expected to quicken in August

The BLS is expected to report that hiring activity reaccelerated in August. Government statisticians are likely to report that non-agricultural concerns added 250,000 net new workers last month, eclipsing the 235,000 average posted over the May-July span. Several fundamental and technical factors underpin the call for a pickup in job growth last month.

Consistent with reduced layoffs during the reference period, the average number of persons filing initial jobless claims contracted by 5K to 272K over the four weeks leading up to the August establishment survey - the lowest tally in three months. 

Meanwhile, the number of persons collecting unemployment insurance benefits was little changed at 2.27 million between surveys, implying that previously jobless persons continue to find work. Hiring breadth expanded substantially over the June-July period, propelling the BLS' three-month employment diffusion index to 66.7 - the highest reading since April. 

The Aruoba-Diebold-Scotti (ADS) Business Conditions Index improved further over the four weeks leading up to the August survey to the highest level since last December. The number of available positions posted online climbed by 34,200 to 5.42 million in August, just 48,000 shy of the all-time high set in March. 

"On the technical side, owing to calendar effects, we expect the BLS' seasonal factors to pare roughly 90,000 off the unadjusted payroll gain, well below the average 160,000-job haircut employed over the preceding five years", notes Societe Generale.