US NFP: Modest pace of growth is anticipated - Westpac

Research Team at Westpac, suggests that the past four months have shown how volatile an indicator of aggregate momentum nonfarm payroll employment is.

Key Quotes

“Not only have we see two abrupt, counteracting shifts in momentum over that time, but revisions have continued to alter history.

Having added a combined 168k jobs in the months of April and May, employment growth surged back in June and July, posting a cumulative gain of 547k. The average monthly gain for 2016 now stands at 186k for payrolls, and 227k for the household survey.

Come Aug, a more modest pace of growth is anticipated for nonfarm payrolls, circa 170k. This will still leave annual employment growth well ahead of population growth and, absent a change in participation, see the unemployment rate edge lower to 4.8%. The risk on this front is that participation will rise, with the unemployment rate then unchanged.”