- Scott Olson / Staff / Getty Images
The focus of Friday’s jobs report is on what it means for the Federal Reserve’s next move.
Economists estimate the Department of Labor will report the US economy added 180,000 jobs in August, according to estimates from Bloomberg.
Following two solid months of job gains, a third strong month is believed by some to be sufficient to compel the Federal Reserve to raise interest rates at its meeting later in September.
But for the Fed to move, this number might have to be a blowout.
“Most things I’ve read say a 225k+ print locks in a hike and should move Fed Futures,” said Dave Lutz, head of ETFs at JonesTrading, in an email Thursday afternoon.
On Thursday, Fed Funds futures reflected a 32% chance of a rate hike in September, and a 59% chance in December, according to Bloomberg data.
This reading was closer to 70% ahead of the Fed’s December 2015 rate hike.
Lutz expects that electronic traders would sell Treasuries and gold on a huge beat, adding that trading programs could also slam stocks quickly, though Lutz conceded stocks are more of a toss-up.
On Thursday, the S&P 500 closed little-changed and extended its streak of trading days without a 1% move to 40.
Lutz also noted Thursday that traders are paying close attention to Goldman Sachs’ forecast for job gains of 165,000, lower than consensus.
This call matters, Lutz said, because “[Goldman has] more peeps now working in DC than anyone else” and their economists should have an edge.
Though as Business Insider’s Myles Udland highlighted last year, only four people, including the president and Treasury secretary, see the jobs report before it’s released.