US jobless rate set to return to single digits

Washington: America’s labour market probably extended its rebound in August to push the unemployment rate below 10% for the first time since the pandemic struck.

With little more than two months before the U.S. election, reattaining that milestone in this week’s jobs report could provide ammunition for President Donald Trump to claim the economy is sustaining a recovery under his leadership. His Democratic opponents, led by Joe Biden, are likely to question whether such improvement can durably continue as America struggles to control the coronavirus.

Employers probably added 1.4 million workers to payrolls last month, not far from July’s result of 1.76 million, according to a Bloomberg survey ahead of Friday’s Labor Department report, which covers the period through mid-August. Economists see the jobless rate at 9.8%, almost triple its level before the pandemic.

The headline payrolls number is likely to reflect a boost from about 238,000 temporary workers hired to conduct the decennial U.S. census. While the overall gains reflect additional business reopenings and an ebbing of Covid-19 cases, the economy remains fragile with the disease untamed.

Weekly jobless-claims figures due Thursday will give a more current sense of the state of the labor market following a report that showed improvement with some caveats.

“The August employment report could deliver the last positive payrolls print before job losses strike again. The disrupted back-to-school process will be a test ahead of the holiday shopping season. For reported net hiring to keep rising, the recovery in the labor market must be robust enough to overcome seasonal factors calling for strong gains over the coming months,” said Yelena Shulyatyeva and Eliza Winger.

Elsewhere, India, Turkey and Brazil will publish second-quarter GDP data and a slew of central bankers is scheduled to speak.

Asia

China’s August PMI reports will be closely watched on Monday for signs the recovery in the world’s second-largest economy is gaining momentum. Manufacturing surveys from across the region follow on Tuesday.

India will release its second quarter GDP data, with analysts expecting an historic contraction due to the world’s biggest lockdown to contain the spread of Covid-19. Analysts will also watch Japan’s industrial production and retail sales as a second wave of the virus spreads.

The Reserve Bank of Australia meets on Tuesday with no change in policy expected, and on Wednesday second quarter GDP data will confirm the economy’s slide into recession. Speeches by Bank of Japan board members on Wednesday and Thursday are also due.

In South Korea, August trade data set for release Tuesday are expected to show the export slump worsening again after three months of improvement.