Private nonfarm payrolls in the US are projected to increase by 201,000 (seasonally adjusted) in tomorrow’s August report from the Labor Department, based on The Capital Spectator’s average point forecast for several econometric estimates. The prediction reflects a modest decrease in the rate of growth vs. July’s 210,000 gain.
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Economic activity in the US services sector posted robust gains in August, throwing more cold water on the idea that the US macro trend is fatally wounded. The headline figure for the ISM Non-Manufacturing Index retreated last month, but only moderately so—and after touching an all-time high in July (based on data that begins in 2008). Meanwhile, Markit’s US Services Purchasing Managers’ Index (PMI) for August was revised up from the previously released flash estimate. As a result, this benchmark rose to its highest level in three months in August, signaling a healthy pace of growth.
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Weekly filings for unemployment benefits rose 12,000 last week to a seasonally adjusted 282,000, the US Labor Department reports. The jump is well above Econoday.com’s consensus forecast that anticipated a small rise to 273,000. But when you step back and consider the trend, the news is still upbeat. Indeed, the four-week average for jobless claims is still close to the lowest level since the early 1970s. Meanwhile, the weekly tally for this leading indicator continues to fall in year-over-year terms, suggesting that the labor market’s expansion will roll on in the near future. Today’s numbers also provide support for thinking that tomorrow’s August employment report from Washington will offer a fresh round of encouraging news for the economic outlook generally.
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The roller-coaster ride in global markets in recent weeks has raised new doubts about economic growth in general and the case for a Fed rate hike this month in particular. But the resilience of key Treasury yields in recent days suggests that the bond market may be rethinking the case for the worst-case scenario that seemed inevitable over a few days last week. It could all reverse course in a heartbeat–especially if tomorrow’s employment report for August falls short of expectations for solid growth. Meantime, the rebound in US yields this week suggests that reports of optimism’s death may have been exaggerated.
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● ADP: A moderate rise for US private employment in August
● US factory orders rise on higher auto demand in July
● Fed’s Beige Book: US expansion continues in July and August
● US mortgage applications surged last week
● Gallup’s US Job Creation Index remains at record high in August
● Eurozone y-o-y rise in real retail sales accelerates to 2.7% in July
● Composite PMI: Eurozone economy “resilient” in August