The August labor report is released on Friday by the Bureau of Labor Statistics. Economists expect nonfarm payrolls to rise by 175,000. The economy created 255,000 jobs in July. ‘We’re looking for 180,000 jobs created in August,’ said Emanuella Enenajor, senior economist, North America at Bank of America Merrill Lynch. ‘It would be a bit of a slowdown from the last couple of readings, but it would be more in line with the 6-month trend.’ Job creation has been volatile in recent months. Some 292,000 positions were created in June, while only 24,000 were added in May. The August report is the final major data point before the Federal Reserve’s all-important September meeting, in which the markets are pricing in a 38 percent chance of a rate hike, according to Bloomberg data. ‘There’s no magic number and the Fed is looking at a variety of indicators in this report,’ Enenajor added. Enenajor said a five-figure reading on Friday would likely put a September rate hike off the table. Regardless of what August jobs growth stands at, Enenajor expects the Fed to hike interest rates in December. The markets agree and have priced in a 61.1 percent chance of a liftoff in December, per Bloomberg data. Aside from the headline jobs number, Enenajor also has her eyes on wage growth, as the latest reading on average hourly earnings will be released in Friday’s report. ‘We’re looking for a 0.2 percent increase in August wages, which is somewhat in-line with the broader trend,’ she said. ‘If you look at wages over the past 2-5 years, you will see very clearly evidence in average hourly earnings that wages are accelerating.’ In July, wages grew 0.3 percent month-over-month. She said jobs in lower paying sectors are seeing wage growth, another healthy sign for the labor market. Analysts will also keep an eye on the labor force participation rate, which stands at 62.8 percent, up from 62.4 percent roughly one year ago. An increase in the rate would push the unemployment rate up, but indicates that more people who had initially given up looking for work, are making attempts to reenter the workforce. TheStreet’s Scott Gamm reports from Wall Street.
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