NFP: Hiring could be a bit brisker than consensus expectations – CIBC

Next week, the key economic data due is the US official employment report. Market consensus points to an increase in payroll by 665K in August; analysts at CIBC have a more optimist forecast of 900K. 

Key Quotes: 

“Hiring looks to have continued at a brisk pace in August, as signalled by a further drop in jobless claims. Higher wages and recruitment efforts likely fuelled a net gain of 900K jobs. Job gains will again have been concentrated in services that have reopened, while state and local governments could have increased headcounts further, making use of recently received federal funds. The lofty gain in jobs could cause the unemployment rate to fall to 5.2% even as participation in the labor force looks set to have increased. Wage gains could have decelerated to 0.3%, still a strong print which would reflect the ongoing labor shortage.”

“Even our projected gain in jobs would leave almost 5mn fewer Americans employed than prior to the pandemic. Unemployment benefit top-ups are in place in many larger states until early September and Covid fears remain, both holding back participation. Moreover, the spread of the Delta variant risks stretching out the recovery in service sectors.”