Goldman Sachs: Jobs To See A Seasonal Tailwind In August

Goldman analysts see nonfarm payrolls rising 350k (private 325k), helped by positive residual seasonality of circa 150k compared to a seasonality headwind of around -100k in the prior report.

• Big Data indicators were generally strong in the month, and jobless claims remain extremely low, especially after adjusting for data distortions.
• The level of labor demand also remains elevated despite declining meaningfully this year. On the negative side, payrolls have exhibited a tendency toward weak August first prints, with a slowdown relative to July in 8 of the last 10 years (and -167k on average).
• The u/e rate is see edging a tenth lower to 3.4% (from 3.46% unrounded in July) with flat-to-up labor force participation and a rise in household employment, the latter of which has underperformed the establishment survey in recent months.
• AHE seen +0.35% M/M, a sequentially slower pace than in July due to easing labor shortages and negative August calendar effects.