Synopsis:

Credit Agricole forecasts a rebound in the US nonfarm payrolls for August, expecting a rise of +165k after July’s weaker performance. The report is anticipated to show some improvement in employment figures, with a slight decrease in the unemployment rate and modest gains in average hourly earnings.

Key Points:

1. Payrolls Forecast:

   • August Estimate: +165k increase in nonfarm payrolls, up from +114k in July.
   • Three-Month Average: Expected to decrease to just above +150k, compared to +170k as of July.

2. Unemployment Rate:

   • Expected Change: Forecasted to decrease to 4.2% from 4.3%.
   • Context: The July rate was 4.25% on an unrounded basis, making a small drop plausible.

3. Average Hourly Earnings:

   • Monthly Increase: Expected rise of 0.3% MoM, up from 0.2% MoM in July.
   • Yearly Pace: Anticipated to tick up to 3.7% YoY from 3.6%.

4. Underlying Factors:

   • July Weakness: Noted to have been influenced by anomalies such as a spike in temporary leave and adverse weather conditions.

Conclusion:

Credit Agricole predicts a modest recovery in the August jobs report, with payrolls rebounding and slight improvements in unemployment and earnings. This recovery may help alleviate some concerns following the weaker July data and adjust perceptions of labor market trends.