Expect another strong month of employment - Nomura

Analysts at Nomura explained that they expect another strong month of employment gains with a forecasted 205k increase in nonfarm payroll employment, further tightening the labor market.  

Key Quotes:

"We expect the private sector to contribute 200k and a 5k addition fro the government.

Partly reflecting a calendar quirk in the establishment survey, we expect average hourly earnings to only increase by 0.1% m-o-m (2.51% y-o-y). 

The strong increase in payrolls will likely reduce the unemployment rate but leave it unchanged on a rounded basis at 4.3%. July’s unrounded unemployment rate of 4.349% sits just barely below 4.4% on a rounded basis, providing some cushion for a decline without a drop in the headline. 

The labor force participation rate (LFPR) will likely remain within the range of 62.6-63.0% seen over the past 18 months. 

However, we will pay close attention to the participation rate for prime age (25-54) workers. This group has seen a notable increase in participation, driven by a sharp uptick in prime age female participation over the past 6 months."