Goldman Sachs lowered its estimate for tomorrow’s key job report following this morning’s ISM data.
In a note to clients, chief U.S. economist Jan Hatzius reduced the firm’s August non-farm payroll estimate to 25,000 from 50,000.
The Goldman economist explained that “The main reason is the accumulation of evidence of weak hiring in late July and August: a sharp deterioration in perceptions of job availability in the latest Conference Board survey, a drop in today’s ISM manufacturing employment index, another drop in job advertising, and a soft ADP report. Layoffs seem to have remained low, given steady jobless claims in the 410,000 range, although even here the recent pickup in layoff announcements is a concern.”
Heading into today, the consensus estimate among economists for the jobs report was 75,000 non-farm payrolls added. If the data comes in below consensus – as Goldman now believes – the price of gold is likely to benefit.