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Nonfarm payrolls is expected to have increased by 220,000 last
month, up from 215,000 in July, according to a Reuters survey of
economists. The data is due at 8:30 a.m. ET.
A strong report would not only underscore the economy's vibrancy
in the face of volatile global financial markets and China's
slowing growth, but also keep alive the prospect of the Fed
raising rates at its Sept. 16-17 meeting.
Economists acknowledge a risk that job gains could come in below
expectations as the first reading of August payrolls in the last
several years has tended to be weaker, before being revised
higher due to seasonal fluctuations.
The volatile markets have prompted some investors to bet the Fed
might wait until the end of the year to hike rates. But Fed Vice
Chairman Stanley Fischer said last Friday it was still too early
to decide if the volatility had made a September hike
unfeasible.
The Fed has said it will increase rates when there is sustained
economic recovery. While the labor market continues to gain
strength, inflation stubbornly remains below the 2 percent
target set by the central bank.
U.S. stocks mostly ended higher on Thursday in choppy trading as
investors remained on edge ahead of the data.
Near-zero rates have allowed the U.S. stock market to stage a
spectacular bull-run since the financial crisis. Higher interest
rates increase the cost of borrowing and impact the profit
margins of companies.
Caterpillar's <CAT.N> shares were down 2.3 percent at 74.38
premarket after Baird downgraded the stock to "neutral".
Netflix <NFLX.O> was down 4.2 percent at $96.80. The stock has
fallen for the past five days.
(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio
D'Souza)
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