Natixis on NFP - FJElite
We expect another lackluster Employment Situation Report this Friday, with payrolls undershooting the consensus expectation and the unemployment rate ticking up a touch. The labor market is still in equilibrium currently, and the unemployment rate has been remarkably stable but we think there is some underlying softness that could be revealed if participation recovers.
Inflation is still the more concerning of the Fed’s mandates, but we see continued softness in labor demand along with tepid wage growth that will not add to inflationary pressures.
We estimate that nonfarm payrolls rose by 25k in August (prev. -23k), which is below the consensus estimate of 55k.
We expect the unemployment rate to increase slightly to 4.2% on the back of higher participation from prime-age workers.
Over the last 10 years, payrolls for July have been revised down seven times.
