Today's Economic Data Highlights: Goldman Anticipates Zero Private Payrolls, -125K Total
Goldman Sachs recaps expectations for today's key event - payroll day… also the ISM nonmanufacturing index and a couple of Fed speeches.
8:30: Employment report for Aug…another modest gain in private-sector hiring? Labor market indicators for July have been mixed, as discussed in last night’s daily comment. Initial claims rose into the payroll survey week, perhaps with some help from distortions, and have since fallen back into the upper end of the previous range. Consumer perceptions of job availability have worsened. On-line job indexes have pulled back. However, the employment index of the ISM’s manufacturing index rose further from an already high level. On balance, we read these data as consistent with no change in private-sector payrolls. The runoff of Census jobs and a modest reduction in government payrolls should then result in a drop in total payrolls similar to what we saw for July. https://portal.gs.com/gs/portal/home/fdh/?st=1&d=9614468.
On total payrolls, GS: -125k, median forecast (of 81): -105k, ranging from -190k to +75k; last -131k.
On private-sector payrolls, GS: flat, median forecast (of 55): +40k, ranging from -12k to +120k; last +71k.
We and others look for an up-tick in the unemployment rate in the wake of the loss of Census jobs. The sharp increase in the number of total beneficiaries following the renewal of the emergency program supports this view, though this figure did pull back in the week ending August 14. It’s noteworthy that not one of the 79 forecasters in the Bloomberg survey is anticipating a decline in the unemployment rate, in contrast to last month (when the Census effect was roughly similar to what we anticipate this time). This probably reflects the downgrade of forecasts that has occurred since then, which in turn is relevant in understanding recent upside surprises in the data – the surprises have occurred against diminished expectations.
GS 9.6%; median forecast (of 79): 9.6%, ranging from 9.5% to 9.8%; last 9.5%.
We continue to look for deceleration in wage inflation on a trend basis as the unemployment rate hovers just under 10% and the broadest measure of underemployment remains in the mid teens.
GS +0.1%; median forecast (of 56): +0.1%, ranging from +0.1% to +0.2%; last: +0.2%.
9:45: Chicago Fed President Charles Evans opens a symposium on OTC derivatives….at the Chicago Fed. Mr. Evans’ next turn as a voting member of the FOMC comes in 2011.
10:00: ISM nonmfg index for Aug…another upside surprise? We and others expect a slight moderation in this measure of economic momentum outside the manufacturing sector. Will we and others be surprised by an increase like we were with the manufacturing index? It’s obviously possible, but far from a foregone conclusion. Monthly changes have only a 0.24 correlation over the past 10 years and only 0.09 in the last five.
GS: 53; median forecast (of 67): 53.2, ranging from 51 to 55.5; last 54.3.
10:00: Atlanta Fed President Dennis Lockhart speaks on the economy….at East Tennessee State University, Johnson City, TN. Mr. Lockhart’s next turn as a voting member of the FOMC comes in 2012.