Synopsis:

Goldman Sachs forecasts a modest increase in US nonfarm payrolls of 155k for August, slightly below consensus expectations. They anticipate a 4.2% unemployment rate, consistent with broader market predictions, and expect average hourly earnings to rise by 0.3%, reflecting a slowdown in wage pressures.

Key Points:

1. Payrolls Forecast:

   • August Estimate: +155k, below consensus.
   • Rationale: Historical trends show August payrolls often have a negative bias, with recent Big Data indicators showing continued slowdown and a diminishing impact from immigration on labor force growth.

2. Unemployment Rate:

   • Expected Change: Decrease to 4.2% from 4.3%.
   • Context: The decline reflects the reversal of temporary layoffs from July related to seasonal and weather factors, with minimal further impact from recent immigration.

3. Average Hourly Earnings:

   • Monthly Increase: Expected rise of 0.3%.
   • Yearly Rate: Projected to increase to 3.7%, reflecting easing wage pressures but influenced by positive calendar effects.

4. Underlying Factors:

   • Payroll Growth Concerns: August payrolls historically show a negative bias and are influenced by severe weather and adjustments in immigration effects.
   • Unemployment Rate Dynamics: Expected drop due to reversal of temporary layoffs and minimal impact from recent immigrants.

Conclusion:

Goldman Sachs anticipates a weaker payroll growth figure for August compared to consensus estimates, with modest improvements in the unemployment rate and average hourly earnings. The report is expected to show a rebound from July’s extreme conditions but highlights ongoing slowdowns in labor force dynamics.