This is it.
At 8:30 a.m. ET, the Bureau of Labour Statistics will publish the August jobs U.S. report.
Nonfarm payrolls: +180k
Private payrolls: +180k
Unemployment rate: 7.4%
“August employment takes on more significance than usual because it is the last employment report that Fed policymakers will have before they sit down for a two-day FOMC meeting later this month (September 17-18),” said Deutsche Bank’s Joe LaVorgna in a note to clients today.
Since May 22, the Federal Reserve has been warning the markets that it may soon begin to taper its monthly $US85 billion worth of purchases of mortgage and Treasury bonds.
Currently, most market economists expect the tapering to be announced when the Fed concludes its FOMC meeting on the 18th. Of course, all of that is contingent upon the health of the labour market and the direction of inflation.
Depending on who you ask, a major downside surprise in the jobs report could delay the taper while an upside surprise may further unify the consensus for a September taper.
A Last Minute Curve Ball
Market economists publish their forecasts for the jobs report days and weeks ahead of the release of the jobs report.
But yesterday’s unusually bullish August ISM services report had economists scrambling to tweak their forecasts. Here’s JPMorgan’s Michael Feroli:
The August ISM nonmanufacturing index defied expectations for a modest decline and instead surged another 2.6 points to 58.6, the highest level since late 2005. The strong headline number was matched by solid details in most of the sub-indices: business activity climbed almost two points to 62.2, new orders were up almost three points to 60.5, and the employment index jumped almost four points to 57.0. While the employment data earlier in the morning were mixed, this report suggests a bit of upside risk to tomorrow’s BLS report. Over the last two months the headline index has risen 5.8 points, the most in any two-month period in the history of the series, which begins in 1997. The exceptional strength in this series is a bit of a head-scratcher, as the hard spending data recently have been just ok, but perhaps firms are seeing some signs of firming demand heading into the fall.
Feroli expects to see 175,000 new jobs added in August.
Here are some other economists who updated their forecasts on Thursday:
We’ll cover the report live on BusinessInsider.com.