Three Datapoints To Watch This Week As We Wait For The Crucial August Jobs Report

The next Jobs Report (which comes out September 6) is going to be one of the biggest ones in a long time.

There are two reasons for that:

• It's the last jobs report before the big September Fed meeting (17th-18th), when everyone expects the "tapering" to begin. If the jobs report is strong, then it's probably a slam dunk that the Fed will start to reduce the pace of its bond purchases. If it's weak, then the fate of that Fed meeting becomes a bit more iffy.
• For the real economy, the report will give us a better sense of whether or not we're reaching escape velocity. We'd had three strong reports, up until the last one, which was a bit of a clunker.

Anyway, the good news is that you don't have to wait until September 6 to get some good data on what's happening to the US labor market.

There's plenty of smaller labor datapoints coming up before then, including three number this week.

Deutsche Bank explains:

Between now and the August employment report (released September 6), market participants will be keenly scrutinizing the economic data for clues as to how the labor market performed this month. This of course is due to heightened anticipation of the Fed potentially tapering asset purchases in September. Last week’s release of the minutes from the July FOMC meeting indicated that policymakers remained broadly comfortable with the timetable laid out by Chairman Bernanke in June. While we expect the August employment report to be the key determinate, other labor market indicators, such as the jobs plentiful/jobs hard-to-get component of the August consumer confidence report (Tuesday), jobless claims, and the employment component of the Chicago PMI (Friday) take on added significance. The fact that the 4-week moving average on jobless claims is at its lowest level since November 2007 bodes well for a firming tone in other labor market indicators.

Indeed. Here's that chart of the 4-week moving average of weekly jobless claims showing the index improving to its best level since the crisis.