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US August jobs report expected to tilt odds in favor of a September hike

 

The Bureau of Labor Statistics' (BLS) update on the employment situation in August will provide a final update on hiring activity ahead of the Federal Open Market Committee (FOMC) meeting on September 16-17. analysis suggests that last month's readings on job creation and unemployment will be consistent with "some" further improvement in labor markets that, along with an above-consensus hike in average hourly earnings, will support  the call for a liftoff in administered rates at the upcoming FOMC gathering.

"We expect government statisticians to report that nonfarm payrolls expanded by 250,000 in August, eclipsing the 235,000 average posted over the prior three months. Fueled by a solid pickup in household employment during the reference period, the civilian jobless rate likely moved one tick lower to 5.2% - the lowest level since April 2008",says Societe Generale.

Reflecting previously discussed quirks associated with the timing of the BLS' canvass, average hourly earnings likely jumped by a consensus-topping 0.4% in August, double July's posted rise. Tempering the expected string of positive figures.

"We expect a four-week interval between establishment surveys to return the average workweek to the 34.5 hours prevailing over the March-June span", added Societe Generale.

 

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