Payrolls without precision

Daily update

US August employment data is due. Falling survey response rates, rising complexity, and less funding for data collection have caused data quality to deteriorate. A range of indicators signal a weaker labor market, without causing middle-income US consumers to weaken much. Federal Reserve Chair Powell’s data dependency focus means a rogue number might deter a US rate cut, but markets assume the narrative of economic weakness takes priority.
Precision is not expected from today’s data. For instance, recent signals of rising native-born employment and declining immigrant employment are probably unreliable; answers to questions from government officials may not accurately reflect migrant status. Skewed answers are a worldwide survey problem.
UK July retail sales were stronger than expected, supported by warm weather and football. The UK ONS reported errors in this year’s seasonal adjustment process which led to a lot of revisions, but the narrative of a relatively ok UK consumer remains.
Eurozone final second quarter GDP is due, and no one really cares. This is part of the bloc’s presentation problem. As a source of demand, production, and wealth, the EU rivals the US. However, only 27 economists make up the Eurozone GDP Bloomberg consensus forecasts, versus 50 for the last US GDP release.