US NFP preview: August typically weaker - Westpac

Richard Franulovich, Strategist at Westpac, pointed out that August is usually a weak month for the US employment report and that during the last 5 years had shown a weaker than expected reading in the NFP.

Key Quotes:

“The first release for August US non-farm payrolls are typically weaker than expected. August is a tricky month for the statistician, peak summer holidays affecting the response rate. In subsequent months August payrolls are usually revised up, often substantially.”

“August payrolls have been weaker than consensus expectations in each of the last 5 years and in 14 of the last 18 years of available data. August has produced the fewest positive surprises over both the last 5 years and 20 years.

“The average shortfall to consensus in the last 5 years has been -49k. The average shortfall to consensus in the last 18 years has been -38k.”

“The average final revision to August over the last five years has been +71k, the largest average final revision for any month of the year.”