NFP: Expecting another solid increase in September – Wells Fargo

Next Friday, the key US official employment report is due. Analysts at Wells Fargo look for another solid increase in payrolls of 275K, a forecast above the 250K of market consensus. 

Key Quotes: 

“The U.S. labor market continues to be one of the strongest parts of the global economy. Nonfarm payrolls rose by 315K last month with industry gains once again widespread. This pace of job growth marks a downshift from the 402K average recorded in the prior three months, but it is nonetheless a robust gain in its own right. For context, nonfarm payrolls increased by an average of 167K per month in the 2010s.” 

“The extremely tight labor market is keeping wage growth above what is consistent with the Fed's 2% inflation target. To achieve a soft landing, the Federal Reserve needs labor demand to cool enough that wages decelerate but not so much that the economy is tipped into a nasty recession.”

“In the near term, we look for another solid 275K increase in nonfarm payrolls in next week's employment report. Another sizable increase in labor force participation would be a welcome development for Fed officials as they attempt the high wire act of bringing labor supply and demand into a healthy balance.”