The August nonfarm payroll report is due September 7 at 1230GMT

Consensus expectations:

  • headline change expected +198K, prior +157K
  • Unemployment rate expected 3.8%, prior 3.9%
  • average hourly earnings expected +0.2% m/m, prior +0.3%
  • average hourly earnings expected +2.7% y/y, prior +2.7%

Preview via Nomura:

  • After a 157k gain in nonfarm payroll employment in July, a somewhat stronger report than the headline reading suggests, we expect a solid 215k increase in NFP employment in August.
  • Part of the below-forecast reading for July was attributable to unusual declines in certain industries that could revert in August
  • A 220k NFP gain in August would be consistent with economic growth of roughly 3%. However, despite forecasting a solid 20k gain in manufacturer employment in August, we see some downside risk to the near- to medium-term employment growth outlook if manufacturing growth slows materially due to trade concerns.
  • With a modestly negative bias due to calendar effects, we expect average hourly earnings (AHE) to increase by 0.18% m-o-m in August, corresponding to 2.69% y-o-y. Consistent with strong employment growth, we expect the unemployment rate to fall 0.1pp to 3.8% in August and see room for a possibly larger decline in light of a possible drop in LFPR.


  • We look for the unwind of a one-off event to help lift nonfarm payrolls to an above consensus 225k in August. The Toys R Us bankruptcy seemingly had its prints all over the July report. Stores for the nationwide chain were closed for good in the last week of June and it seems the 30k+ in layoffs on the follow impacted job growth materially. Indeed, the "Sporting Goods, Hobby, Book & Music Stores" component slipped an unprecedented 32k on the month.
  • Fundamentally, trend payroll growth looks to be about 200k as evidenced by 1) strong ADP (which has about 1/3 the volatility of monthly NFP), 2) initial jobless claims that just printed a new record low (back to 1948, population-adjusted), and 3) job openings that remain near all-time highs at an eye popping 6.6 million (there are more openings than officially unemployed folks right now). Look for the unemployment rate to slide about 0.1ppt to 3.8% as well