The present lineup of US nowcasts for the third quarter proceed to point a softer however nonetheless stable progress fee. Wall Road is questioning if the upcoming report for August will change the calculus.
Let’s begin with the present nowcast for Q3 GDP. The median estimate, based mostly on a set of projections compiled by CapitalSpectator.com, is 2.1%.
That marks a slowdown from the sturdy 3.0% rise in Q2, however a 2% enhance – if appropriate – continues to be sturdy sufficient to dismiss considerations that an NBER-defined recession has began.
Nowcasts, in fact, are finest guesses utilizing the accessible information, and so all the usual caveats apply. But it surely’s encouraging that the present Q3 nowcast stays comparatively regular at/close to the two% mark.
The present 2.1% nowcast is barely above the (Aug. 27).
The query is whether or not Friday’s replace on August payrolls will paint a unique outlook. Latest information for the labor market exhibits an ongoing slowdown in hiring and a average rise within the .
Analysts are nonetheless debating the implications, however by some accounts, the tide has turned for the financial system and recession threat is rising. Markets shall be keenly watching the upcoming jobs information for reassessing the outlook, for good or ailing.
“We don’t search or welcome additional cooling in labor market circumstances,” Fed Chairman Powell mentioned in a speech in Jackson Gap, Wyoming, in late-August.
Nomura Securities predicts a stronger tempo of hiring in Friday’s report. “We anticipate the employment report to point out a reassuring rebound in job features and a downtick within the unemployment fee,” the agency wrote in a analysis word on Friday.
“The labor market is cooling, however in our view, the weak point in July was overstated.”
Economists typically agree, based mostly on the median level forecast through Econoday.com. Complete nonfarm payrolls are projected to rise 160,000 in August, up from a weak 114,000 enhance within the earlier month.
