US NFP Preview: 8 Major Banks expectations from August payrolls report

Today, the US jobs report for August is due to be reported at 1230 GMT, and as we get closer to the release time, here are the expectations as forecasted by the economists and researchers of 8 major banks, regarding the upcoming employment data.

Most of the economists and researchers are expecting the US NFP to print in between 145-175k in August, following the previous month’s reading of 164k. In addition, they are forecasting the unemployment rate to remain steady at 3.7% in June.

Goldman Sachs

Analysts at Goldman Sachs offer a sneak peek at what to expect from Friday’s US Non-Farm Employment Change data due to be reported at 1230 GMT.

“Estimate the headline nonfarm payrolls +150k.

Our forecast reflects a 15-20k boost from Census canvassing activities, but a slower underlying pace of private-sector job gains in part reflecting the return of the trade war.

Unemployment rate unchanged at 3.7%.

Average hourly earnings +0.2% m/m and 3.0% y/y.”

Danske Bank

“In the US, the labour market report is due today. The US labour market has shown weakness for a while, so we think it is important to keep an eye on employment growth, which is an important recession indicator.”

“We expect employment growth to come in around 164,000. Further, we estimate average hourly earnings rose 0.30% m/m in August, unchanged at 3.1% y/y.”

TD Securities

“We expect payrolls to trend modestly lower to 145k in August (mkt 160k), following the 164k print in the previous month. That said, the strong increase in services-sector employment in the August ADP report raises the odds of an upside surprise.”

“We also note that the start of temporary census hiring for canvassing purposes could further boost the headline number. All in, the household survey should show the unemployment rate remained steady at 3.7%, while we expect wages to rise 0.2% m/m, dragging the annual print lower to 3.0% in August.”

Westpac

“In 2019, employment growth has throttled back to 165k. This is still ahead of the monthly pace necessary to keep the unemployment rate steady, but is a material deceleration from the strong 200k per month gains of the past 8 years.”

“We look for job growth to slow further in coming months, forecasting a 140k gain for August and an average circa 130k through H2 2019. If this occurs, then the unemployment rate will stabilise around its 50-year low.”

“For wages, the tight labour market should be enough to sustain growth between 3.0% and 3.5%yr. However, a renewed uptrend above the top end of this range seems increasingly unlikely. Along with softer job growth, the stabilisation of wages growth will weigh on spending growth.”

ANZ

“The August ADP report was quite a bit stronger than expected. Private payrolls rose 195k vs 142k in July (156k). The data supplemented the initial claims data for the NFP survey week and suggest a solid non-farm payrolls number today – the median expectation is 160k.”

“The data imply the labour market, particularly service-producing jobs (+184k), is weathering the tariffs well. Without a downturn in private service sector jobs in the US, history shows that a recession is very unlikely.”

National Bank Financial

“In the U.S., the most important piece of news will be August’s non-farm payrolls. Jobless claims continued to hover near 50-year lows in the month, hinting at a very subdued rate of layoffs.”

“Hiring, meanwhile, may have accelerated slightly judging from a spike in the percentage of respondents to the Conference Board confidence survey who deemed jobs plentiful in the month. Accordingly, we’re calling for a slight acceleration in employment creation to 175K.”

CIBC

Analysts at CIBC, expect non-farm payroll to show a gain of 175K in August, above consensus. 

“While the headline employment figure in August will be boosted by roughly 40,000 from temporary hiring for the 2020 decennial census, stripping out those jobs will reveal a further slowdown. That’s in line with other indicators of activity that show the US economy cooling, including the slowdown in aggregate hours worked and business investment.”

“With initial jobless claims near their cyclical low, and jobs reported to have been plentiful in the Conference Board’s consumer confidence survey, the US labor market remains healthy. Moreover, a 0.2% monthly gain in wages will translate into 3.4% annual wage growth, a two tick acceleration from the prior month.”

“Although job growth is set to continue to slow to a pace that is more closely aligned with growth in the labor force, higher wages, lower interest rates, and a savings cushion should allow consumer spending to remain reasonably healthy.”

Rabobank

“The key action today is all about US payrolls, where the expectation is 160K, similar to last month’s 164K, and average earnings at 0.3% m/m, 3.0% y/y. If so, there is really nothing new there to see.”