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Census Hires Could Make U.S. Jobs Report Less Than Meets the Eye

Nonfarm payrolls increased by about 160,000 in August, according to Bloomberg’s survey.

Census Hires Could Make U.S. Jobs Report Less Than Meets the Eye
A representative, left, shakes hands with a job seeker at the San Francisco Career Fair & Job Fair in Burlingame, California, U.S. (Photographer: David Paul Morris/Bloomberg)

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U.S. jobs data due Friday may be inflated by Census Bureau hiring for the 2020 count, and economists say the underlying numbers may show that job gains are slowing.

Nonfarm payrolls increased by about 160,000 in August, according to Bloomberg’s survey, a level that would be just under the prior month, but still more than enough to keep pace with growth in the working-age population. The unemployment rate is projected to hold at 3.7%, just above a 49-year low, though annual wage gains are seen cooling to 3%, the weakest in almost a year.

But some economists said their estimates reflected an expected temporary boost from recent Census hiring. The bureau kicked off its first major field operation last month, and it plans to hire about 40,000 people for the effort. For the next several weeks, temporary hires will travel door-to-door to verify addresses ahead of the 2020 count.

The bureau said it had hired more than 26,000 of the canvassers as of Aug. 19. A larger bump is likely next year, when Census plans to hire about 500,000 temporary workers.

Private payrolls, which may be a better gauge should Census hiring affect the main number, are seen rising by 150,000 after a prior gain of 148,000.

Estimates in Bloomberg’s nonfarm payrolls survey range from 110,000 to 232,000. Other labor-market indicators have given mixed signals in August.

Data this week showed that companies in the ADP Research Institute report added 195,000 workers, the most in four months. But the Institute for Supply Management gauge of factory employment fell to the lowest since 2016.

Should Friday’s report leave investors unsure about the implications for Federal Reserve policy, Chairman Jerome Powell will have an early opportunity to explain. He’s due to speak four hours after the release of the jobs data -- answering questions from a moderator at the University of Zurich.

Here’s what economists are saying, with projections listed from low to high:

Bank of America

  • 130,000 jobs, 3.7% unemployment, 3.1% annual wage growth
  • “On private payrolls which exclude government workers, we forecast an increase of 120,000, implying public employment should grow by 10,000 in August,” Joseph Song wrote. “There is some upside risk to our nonfarm payrolls growth forecast from potential early hiring of 2020 census workers.”

Wells Fargo

  • 135,000 jobs, 3.7% unemployment, 3% annual wage growth
  • “Monthly job gains have slowed so far this year, yet the underlying pace is still solid enough to promote moderate gross domestic product growth,” Senior Economist Sam Bullard wrote in a report. “That said, the U.S. labor market is not immune to the deceleration in the pace of overall economic growth we have seen recently, and will ultimately show up in future hiring plans.”
  • Bullard added that the possible addition of temporary 2020 Census hiring is a “wild card.”

Goldman Sachs

  • 150,000 jobs, 3.7% unemployment, 3% annual wage growth
  • “Our forecast reflects a 15,000-20,000 boost from Census canvassing activities, but a slower underlying pace of private-sector job gains in part reflecting the return of the trade war,” Spencer Hill wrote in a note. “We also expect August residual seasonality to weigh on” the figures by around 30,000.

Bloomberg Economics

  • 175,000 jobs, 3.6% unemployment, 3.1% annual wage growth
  • “Temporary hiring ahead of the 2020 census should boost employment by about 40,000,” economists Carl Riccadonna and Yelena Shulyatyeva wrote in a report. “Excluding census hires, we project a below-consensus print of 135,000. Because of this distortion, private payrolls will provide a clearer read of labor conditions.”

Morgan Stanley

  • 181,000 jobs, 3.7% unemployment, 3.2% annual wage growth
  • “Most key data on the labor market for August out so far have sent rather positive signals,” economists led by Ellen Zentner wrote in a report. “Initial jobless claims continued to run at low levels and there were no particular indications that the rate of hiring might have slowed markedly.”

--With assistance from Chris Middleton.

To contact the reporters on this story: Jeff Kearns in San Francisco at jkearns3@bloomberg.net;Reade Pickert in Washington at epickert@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Ben Holland

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