The Economic Week Ahead: September 2-6

The shortened week ahead is an important one for labor market indicators. We expect them to show that August's employment continued to grow at a solid pace, and better than July's pace, which was weakened by bad weather. That should lift bond yields, the dollar, and cyclical sectors of the S&P 500. Here's more:

(1) Employment. August's employment report (Fri) should show payrolls rose by 200,000-225,000 to another record high and that the average workweek rebounded from July's weather-depressed reading. In any event, the average monthly increases recently suggest that the labor market has normalized back to its pre-pandemic average of roughly 170,000 per month (chart).