August Nonfarm Payrolls: Strong Jobs Numbers May Weigh on US Stocks

The upcoming US nonfarm payroll report for August is being closely watched by investors and analysts. Market consensus expects a modest rebound from July's decline, with a projected 55,000 new jobs added to the economy. However, Goldman Sachs takes a more cautious stance, predicting only 40,000 new jobs.

According to JPMorgan, Fed Chair Warsh has made it clear that the economy is at full employment and inflationary pressures remain elevated. This means that strong employment numbers could actually weigh on US stocks by pushing bond yields higher.

JPMorgan believes that next week's CPI data will have a greater impact on the September 16 Fed meeting than tonight's nonfarm report. If August nonfarm payrolls turn negative again, there is no precedent for the Fed to raise rates after two consecutive months of negative job growth.