In August, U.S. job creation probably picked up that signaled a steady pace of economic growth, which gives ammunition to the Federal Reserve to start scaling back its massive monetary stimulus this month.
According to a Reuters’ survey of economists, employers are expected to have added 180,000 jobs to payrolls last month after creating 162,000 in July. The unemployment rate is seen steady at a 4-1/2-year low of 7.4 percent.
The jobs report from the U.S. Labor Department would offer an important piece of evidence for the Federal Reserve as it debates the future of its $85 billion per month bond-buying program.
“You will have to have very poor employment data to really have the Fed delaying tapering. We think that anything above 140,000 will be sufficient for the Fed to taper … We look not only for confirmation that they are going to taper but also the size of the tapering,” said Thomas Costerg, a U.S. economist at Standard Chartered Bank in New York.
The employment report would suggest the economy remained on a steady growth path despite stumbling early in the third quarter, if the forecasts of economists are correct. Fears about growth fanned after weak July data on consumer spending, home building, new home sales, durable goods orders, and industrial production but the concerns were eased with reports of solid automobile sales in August, strong services sector growth and a steady expansion at the nation’s factories.
“As long as we don’t see a clunker, we can take comfort that the economy, while not generating as many jobs as we would like, is going in the right direction,” said Robert Dye, chief economist at Comerica in Dallas.
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