August jobs report likely to show more solid growth
The August jobs report highlights a jam-packed week of economic news that also features a revised estimate of second-quarter economic growth and the latest data on consumer confidence and spending, as well as manufacturing activity.
In July, consumer confidence approached the 16-year high reached early this year. PNC Financial Services Group expects a modest decline as fallout from President Trump’s recent remarks about the race-related rallies in Virginia “curbs consumers’ enthusiasm.” But Nomura economist Lewis Alexander says “recent polls suggest that controversies related to President Trump’s response to the events in Charlottesville, Va., may have little effect on Trump’s standing with Republican voters.” Overall, economists expect the Conference Board on Tuesday to report just a modest retreat in consumers’ outlook on economic conditions and the labor market.
Wednesday, the Commerce Department releases its second estimate of economic growth in the April to June period. Its initial reading was that the economy rebounded from a listless first quarter and grew at a healthy
2.6% annual rate. But recent reports suggest retail sales and consumer spending increased more than previously thought, as did business stockpiling, Alexander notes. Economists expect Commerce to bump up its estimate slightly to 2.7%.
Consumer spending growth was tepid in the spring, with outlays rising just 0.1% in June. But retail sales data and stronger demand for utilities suggest consumption has picked up notably, Alexander says. Economists expect Commerce on Thursday to announce that personal spending rose a fairly vigorous 0.4% in July.
The labor market has sizzled so far this summer as job gains topped 200,000 in both June and July, pushing the monthly average for the year to a solid 184,000. Initial jobless, a gauge of layoffs, have hovered near 40-year lows, suggesting employment growth is unlikely to tail off significantly anytime soon. Economists expect the Labor Department on Friday to report that employers added
180,000 jobs in August. Likewise, the manufacturing sector has been a reliable pillar of growth as a result of the revival in oil drilling and an improving global economy that has lifted exports. Economists expect the Institute for Supply Management to report that its index of factory activity held steady in August at a level that signifies a continued sturdy expansion.
In July, consumer confidence approached the 16-year high reached early this year. PNC Financial Services Group expects a modest decline.