August Employment Report Preview

With fears of a recession on the rise, investors are looking for any potential signs of cracks in the economic picture. Tuesday’s ISM Manufacturing report, which showed the first contraction in the manufacturing sector in a couple of years, was one of those signs, but the stronger than expected report from the ISM Services report earlier today helped to allay those concerns. When it comes to the market, trade talks, or economic data, lately it seems like we’re simply running in place. For every good market day, tweet, or economic report, it seems as though there is a negative one to offset it. Today’s rally in equities looks to be an attempt by the market to break out of the rut it has been in, so will tomorrow’s payrolls report start another positive streak for the economy?

Heading into tomorrow’s report, economists are expecting an increase in payrolls of 160K, which would be a slight decline from July’s reading of 164K. In the private sector, economists are actually expecting a slight increase from July to 150K from 148K. Not surprisingly, job growth in the manufacturing sector is expected to slow from 16K from 5K. The unemployment rate is expected to remain unchanged at 3.7%, average hourly earnings growth is expected to remain at 0.3%, and average weekly hours are expected to increase to 34.4 from 34.3.

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