U.S. August Payrolls Seen Staying Soft; Only a Big Surprise Likely to Shift the Fed Outlook

BlockBeats reports that the U.S. August nonfarm payrolls report is due at 8:30 p.m. Beijing time on Sept. 4. Consensus expectations call for payrolls to rise by 56,000, following an unexpected drop of 23,000 in July. Forecasts vary widely, from a decline of 25,000 to a gain of 121,000, underscoring a split view on the underlying strength of the labor market. The unemployment rate is broadly expected to hold at 4.1%, though some economists see it edging up to 4.2%. Annual wage growth is projected to slow to 3.0% from 3.2%. Morgan Stanley Chief Economist Michael Gapen estimates that the revocation of temporary protected status for Haitian immigrants could cut payrolls by about 15,000. Offsetting support may come from hiring in local government education, as well as leisure and hospitality. Most economists expect the report to be a secondary input for the Federal Reserve's Sept. 15&16 meeting unless the data deliver a major surprise, with attention likely to shift to next week's CPI release. Fed Governor Christopher Waller said Thursday that if incoming data continue to show easing inflation pressures, he would favor keeping rates unchanged this month. Market pricing currently implies about a 50% probability of a September rate hike, down from 63.2% on Wednesday.