Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A 230k August nonfarm payroll increase is anticipated, after gains of 528k in July, 398k in June, and 386k in May. Payroll growth should slow through 2022 alongside reduced GDP growth, and the climb in the initial and continuing claims in August suggests downside payroll risk for the month. We assume a 25k factory jobs rise in August, after a 30k July increase. We expect the jobless rate to hold steady for second month at 3.5%. Hours-worked are assumed to rise 0.1% after the 0.4% gain in July, while the workweek ticks down to 34.5 from 34.6 in July. Average hourly earnings are assumed to rise 0.2%, after a 0.5% July gain, while the y/y wage gain should hold steady from 5.2%. In the last expansion, we saw a 3.5% peak for y/y wage gains in both February and July of 2019, before the pandemic-boost to an 8.0% peak in April of 2020. The ensuing strength in wage gains has allowed continued robust y/y increases into 2022, though the return of low-paid workers to the workforce is likely restraining wage increases.
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