The mother of all economic indicators - the monthly non-farm payroll numbers - will be coming out at the end of this week.
The July report showed a gain of 163,000 jobs in the month. This surpassed expectations by a wide margin, but Societe Generale's Senior Economist Brian M. Jones thinks that last month's report was a fluke of seasonal adjustment. The July numbers were overstated, and a correction might be coming in August, he says. While the economists' consensus estimate for the August report is for 125,000 jobs added, Jones expects 70,000.
"I think we are going to see a soft report next week," Jones said. "Markets will probably rally if we see a weak report, because this increases the likelihood that the Fed will take further action at the Sept. 12 meeting."
Last week, Fed Chairman Ben Bernanke gave strong indications that the central bank is considering another round of quantitative easing - large-scale asset purchases to stimulate economic growth.
"The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant," Bernanke said last Friday. He expressed concern over the lack of a net improvement in the unemployment rate. The Fed's is mandated to minimize unemployment and keeping prices under control.
Before the Friday jobs report, a few previews will come out. Thursday we will get last week's jobless claims numbers, as well as an estimate of August job growth from ADP, a payroll company.
Vincent Trivett is a New York-based multimedia journalist. He writes about the markets and the economy for Minyanville.com. Vincent is a recent graduate of CUNY's Graduate School of Journalism.