Here's your full preview of the jobs report on a big day for America's economy
Headlining these will be the monthly jobs report, due from the Bureau of Labor Statistics at 8:30 a.m. ET.
To recap July, the economy added 209,000 jobs, many more than expected, thanks to strong hiring in the leisure and hospitality industry. The unemployment rate fell back to a 16-year low of 4.3%. Wage growth remained anemic but was slightly stronger than forecast, rising at a faster rate for lower-paying jobs and by 2.5% year-on-year.
President Donald Trump praised the report, tweeting that he had "only just begun."
Here's what economists are forecasting for August, according to Bloomberg:
- Nonfarm payrolls: +180,000
- Unemployment rate: 4.3%
- Average hourly earnings month-on-month: +0.2%
- Average hourly earnings year-on-year: +2.6%
- Average weekly hours worked: 34.5
The level of strong hiring can continue as long as the economic recovery is sustained and businesses don't see any reason to lay off workers. Earlier this week, the Commerce Department reported that second-quarter gross domestic product - the value of every thing and service produced - increased at the fastest pace in two years, by 3%.
But economists don't expect the pace of job creation to be sustained at 200,000 or more every month, since the unemployment rate is at a 16-year low. Nonfarm payrolls have not gained by more than 200,000 for three or more straight months since early 2016, said Josh Wright, chief economist at the recruitment-software provider iCIMS.
And on the ground, it appears that many people of working age remain out of the labor force. This partly has to do with an aging population.
"We have so many people that are getting towards the end of their lives, and even though they are counted in the population, they have essentially dropped out of the labor force," said Gian Luca Clementi, an associate professor of economics at New York University's Stern School of Business.
Business Insider's Pedro da Costa highlighted the long queues for Amazon's Jobs Day on August 2 as evidence of low labor-force participation. But at the same time, Deutsche Bank's Brett Ryan sees Amazon's hiring spree as possibly leading to a bump in trade, transportation, and utilities sector.
Economists will also be watching retail. Amid mass store closures, hiring in July increased on net for the first time since January.
The hospitality sector could see a slowdown following a surge in hiring that has been led by restaurants, UBS' Seth Carpenter said in a note.
Hurricane Harvey is likely to slow hiring, but won't show up in the August jobs report because the survey week, which included the 12th, was before the disaster. "While some output will be lost in the wake of the storm, and other smaller metro areas will also see reduced production, most of the difference will be made up in the months ahead," said Gus Faucher, the chief economist at PNC, in a note.
The Federal Reserve will be paying attention to the share of working-age Americans who are in the labor market, and to how quickly their wages are rising. It meets from September 19-20 to decide on whether to raise borrowing costs.