GS economics (led by Jan Hatzius) with a note on the non-farm payroll report and the Federal Open Market Committee (FOMC) implications
ICYMI, the July report was a solid one:
And, more:
- Reactions to the July US non-farm payrolls report
- The jobs data was good, but can the US dollar hold its gains?
OK, over to GS (in brief summary, bolding mine):
- Nonfarm payrolls ... reflecting broad-based growth across industries
- our Fed probabilities unchanged, with a cumulative probability of 60% for another hike by the December meeting
- solid growth in manufacturing jobs
- modest rise in construction employment
- unchanged mining and logging payrolls
- Employment growth in private service-providing industries accelerated to a 10-month high
- Retail employment was soft for the second month (+1k) but nonetheless remained firmer than the outright declines seen in each of the previous four months
- Government payrolls rose 4k
- The breadth of job growth was particularly encouraging
- unemployment ... broader U6 rate remained unchanged at 8.6%, as a decline in the share of workers on part-time schedules for economic reasons was partly offset by an increase in the share of marginally attached workers
- Our Q2 wage tracker - which distills signals from several wage measures - held steady at 2.3%
GDP & FOMC:
- We increased our tracking estimate for Q3 GDP by one tenth to 2.6% (qoq ar)
- We left our Fed probabilities unchanged, with subjective odds for the timing of the next rate hike at 5% for September, 5% for November, and 50% for December, for a 60% cumulative probability of at least three hikes this year
