Analysts at Rabobank note that markets will have more labor market data from the US to scrutinize.
Atlanta Fed’s GDPNow stands at a robust 5.9% for Q3
“The ADP’s August private payrolls estimate is seen at 195K, down from July’s lofty 324K. While the July figure painted a picture of a labour market that remains very expansionary, it was also almost double the BLS estimate of a somewhat more modest 172K change in private payrolls. With no meaningful correlation between the two reports, ADP’s forecasting accuracy appears mostly random. If their estimate is right, it’s almost serendipitous. If wrong, it’s a sitting duck for another portion of ridicule pointed at economists.”
“We will also see the second estimate of US Q2 GDP. A 2.4% release is expected, unchanged from the first estimate. With September approaching, markets will likely ignore this backward-looking data and focus on Q3 growth instead. The Atlanta Fed’s GDPNow forecast currently stands at a robust 5.9% for that quarter. Who would have thought that a year ago, when Fed Chair Powell warned that the Fed’s policy would bring pain to households and businesses?”