August Jobs Report Could Show Negative Payrolls Due to One-Time Factors
Macro
The August nonfarm payrolls report may surprise to the downside, with KPMG Chief Economist Diane Swonk warning that one-time factors could push the number into negative territory despite an improving trend this year. The loss of temporary protected status for 330,000 Haitian immigrants, about 200,000 of whom had work permits, is expected to weigh on payrolls, as employers must let them go without other work visas. Additionally, closures of U.S. meat-processing plants due to beef shortages could further muddy the figures. The consensus estimate stands at 55,000, but Swonk sees potential for a negative print, noting August's historical tendency to undercount initially. Offsetting factors include a rebound in local education hiring and a steady labor market, while the unemployment rate is expected to tick up to 4.2% from 4.1%. Wage growth is forecast to cool to 3.0% year-over-year, which could influence the Federal Reserve's September decision.
