US NFP: Expect another strong reading of 205k for August - Nomura

Analysts at Nomura expect another strong month of US employment gains with a forecasted 205k increase in nonfarm payroll employment, further tightening the labor market (Consensus: 180k).

Key Quotes

“We expect the private sector to contribute 200k (Consensus 170k) and a 5k addition from government. We forecast a 14k increase in manufacturing employment (Consensus: 9k). Partly reflecting a calendar quirk in the establishment survey, we expect average hourly earnings to only increase by 0.1% m-o-m (Consensus: 0.2%) bringing the y-o-y rate to 2.51%.”

“The strong increase in payrolls will likely reduce the unemployment rate but leave it unchanged on a rounded basis at 4.3% (Consensus: 4.3%). July’s unrounded unemployment rate of 4.349% sits just barely below 4.4% after rounding, providing some cushion for a decline without a drop in the headline. The labor force participation rate (LFPR) will likely remain within the range of 62.6-63.0% seen over the past 18 months.”