MNI US Payrolls Preview: Slack Metrics Eyed With Risks Rising

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Executive Summary

• Nonfarm payrolls growth is seen at 75k in August (sa) per the broad Bloomberg survey, after 73k in July.
• Revisions are going to be particular focus after last month’s huge downward revisions heavily altered recent trends, with non-health private payrolls growth at best stalling for the past three months, and dominated the market reaction.   
• The median primary dealer analyst eyes 70k whilst the Bloomberg whisper currently sits at 83k but with the ADP report still to come after publication of this preview.   
• Payrolls figures are increasingly being seen in light of a sharply reduced ‘breakeven’ pace on significant moderation in labor force growth. We generally see estimates between 50-100k/month.
• The unemployment rate is seen at 4.3% but with a sizeable skew towards a 4.2% - it doesn’t take much from 4.25% in July. This rate has moved within a 4-4.25% range since July 2024 and will be watched closely as gauge of labor market slack amid uncertainty over the signal sent by monthly payroll changes.
• An added complication worth considering is the soon-to-be-published preliminary benchmark revision due Tuesday (Sep 9), with expectations of a second year of heavy downward revisions.
• Whilst there has been a dovish build-up to this payrolls report, and with ADP and ISM services still to come before then, we currently assess that risks for market reaction are skewed towards a downside surprise.