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 A Reuters survey of economists forecast non-farm payrolls increased
by 220,000 last month, up from 215,000 new jobs in July.
That would underscore the economy's vibrancy in the face of volatile
global financial markets and China's slowing growth, and keep alive
the prospect of the Fed raising benchmark overnight rates at its
next policy meeting, on Sept. 16-17.
"We don't think it will detract from the possibility that the Fed is
considering a September rate hike, only if we saw ominous signs of a
deterioration elsewhere in the data," said Sam Bullard, a senior
economist at Wells Fargo Securities in Charlotte, North Carolina.
The Labor Department will release its closely watched employment
report on Friday at 8:30 a.m. EDT (1230 GMT).
In the wake of the recent global equities selloff, financial markets
significantly scaled back bets on a rate hike over the past month.
But Fed Vice Chairman Stanley Fischer told CNBC last week it was too
early to decide whether the stock market rout had made a September
rate increase less compelling.
Economists acknowledge a risk that job gains could come in below
expectations as the first reading of August payrolls has tended to
be weaker in the last several years before being revised higher.
They say the model the government uses to smooth the data for
seasonal fluctuations often does not fully capture statistical noise
from the start of a new school year. In addition, the response rate
from employers to the government's job survey tends to be low in
August.
According to Goldman Sachs, preliminary August payroll numbers have
undershot expectations by an average of 30,000 since 2010, while
subsequent revisions have averaged 79,000 over the past five years.
ECONOMIC MOMENTUM
"Despite the stock market volatility this month and the growing
cracks in China's economy ... we don't see any signs of slowing in
the labor market yet," said Andrew Chamberlain, chief economist at
Glassdoor in San Francisco.
Sturdy payroll gains would add to a string of upbeat data, including
figures on automobile sales and housing, that has suggested the
economy was moving ahead with strong momentum early in the third
quarter after growing at a robust 3.7 percent annual rate in the
April-through-June period.
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If the jobless rate falls one-tenth of a percentage point as
expected that would take it to its lowest level since April 2008 and
bring it into the range that most Fed officials think is consistent
with a low but steady rate of inflation.
Jobs gains were likely spread across nearly all sectors of the
economy in August. The energy sector, which is still grappling with
last year's sharp drop in crude oil prices, is expected to be the
exception.
Robust demand for autos is seen boosting manufacturing employment,
while solid gains are forecast for construction payrolls as housing
gains muscle.
Average hourly earnings are expected to have risen 0.2 percent - the
same as in July. That would leave them around 2.2 percent above
their year-ago level, still well below the 3.5 percent growth rate
economists consider healthy.
Some analysts think earnings are being held back by falling wages in
oil field services.
But a tightening labor market and decisions by several state and
local governments to raise the minimum wage should eventually
translate into faster earnings growth and give the Fed confidence
that inflation, which collapsed with oil prices, will move closer to
its 2 percent target.
A number of retailers, including Walmart, Target and TJX Cos,
have increased pay for hourly workers.
(Reporting by Lucia Mutikani; Editing by Leslie Adler)
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