Economists predict that nonfarm payrolls growth will slow in August. Amira Karaoud/Reuters
US stock futures rose Friday ahead of August's key nonfarm payrolls data.
Expectations are that the jobs report will show an increase in 725,000. This is a slower reading than July's 943,000.
Analysts said that a lower number than expected will encourage the Federal Reserve's support for the economy.
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The US stock market climbed Friday, while the dollar held steady after a sharp decline. Investors were waiting for key employment data to help them determine the Federal Reserve's monetary policies.
S&P 500 futures rose 0.9% on Thursday, as the index rose by 0.28% to reach a new record high of 53. Futures for the Nasdaq 100 were 0.16 percent higher and Dow Jones futures rose 0.14.
The dollar was essentially flat in the interim, and the dollar index hovered at 92.2.
The index fell from 93 last Friday, when Fed Chair Jerome Powell refused to set a time frame for the central bank's withdrawal of support for the US economy. Investors also sold the greenback in anticipation of Friday's nonfarm payrolls data. This data is expected to show a slowdown for August hiring.
Other markets saw Europe's Stoxx 600 slip 0.05% and China's CSI300 fall 0.54% overnight. Tokyo's Topix index rose 1.61% to a new 30-year high following Yoshihide Sug, the Japanese Prime Minister, declaring he would resign. This has triggered hopes that his replacement will increase stimulus spending. The Nikkei 225 closed 2.05% higher.
At 8.30 AM, the US monthly jobs data is expected to be released. ET. It is expected that the nonfarm payrolls increased by 725,000 in August according to economists polled at Bloomberg. This is down from the 925,000 increase recorded in July. However, economists have a wide range of predictions. They can expect anything from 1 million to 400,000.
Investors will closely monitor the data as it could impact Fed's views on when to "taper" its bond purchases. Currently, they run at $120 billion per month.
Continue reading: A market veteran of 48 years warns that the Fed may have to tighten its policy "way sooner" than investors expect as inflation continues to rise - leading to a stock market crash up to 80%
Jeffrey Halley, Oanda's senior market analyst, stated that a thruppence less than 600,000 jobs would push back tapering expectations of the Fed. "This will lead to markets buying everything and selling the US dollar."
However, Pantheon Macroeconomics' chief economist Ian Shepherdson said that Friday's numbers will not have much impact on the Fed because they were collected before schools returned. He said that this should have an impact on key data points such as the labor participation rates.
He said, "We expect the tapering announcement in December." "By then the Fed will have both November and October reports. This should give the Fed the green light to reduce the pace of incremental stimulus."
Friday was quiet in the bond market, with yields on key 10-year US Treasury notes hovering around 1.297%. Prices are inversely related to yields.
Brent crude oil fell 0.12% to $72.96 per barrel on the oil market, while WTI crude fell 0.43% to $69.69 per barrel.
Bitcoin, the largest cryptocurrency, fell slightly after it broke through the $50,000 barrier Thursday, as digital assets rallied. It was at $49,460 as of Friday.
