Barclays Warns Nonfarm Payroll Growth May Be Inflated

A recent nonfarm payroll report in the U.S. has shown strong growth, but Barclays believes this is partly due to technical factors rather than a sustained improvement in labor demand.

The data showed an increase of 162,000 jobs in August, exceeding Barclays' forecast of 25,000 and market expectations of 55,000. However, the bank's analysis suggests that some of this growth is due to a seasonal rebound in the leisure and hospitality industry and local education employment.

Barclays maintains its baseline forecast of a 25 basis point rate hike in September and notes that inflation data next week will be a key variable. The bank expects moderate inflation readings, which may not be enough to rule out a rate hike.