U.S. investment banks Goldman Sachs on Thursday slashed its estimates for nonfarm payroll growth to a net 25,000 jobs created in August from an earlier estimate of 50,000 new jobs.
The bank said weaker consumer confidence figures and other jobs-related data prompted its analysts to grow a more pessimistic.
The Labor Department will unveil official figures on Friday.
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"We are lowering our forecast for tomorrow’s nonfarm payroll report to plus 25k, from plus 50k previously. The main reason is the accumulation of evidence of weak hiring in late July and August: a sharp deterioration in perceptions of job availability in the latest Conference Board survey, a drop in today’s ISM manufacturing employment index, another drop in job advertising, and a soft ADP report," the bank says, according to the Wall Street Journal.
Goldman Sachs was referring to key economic indicators.
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The ADP's National Employment Report shows that the U.S. nonfarm private business sector rose 91,000 from July to August, less than predicted, Forbes reports.
The Institute for Supply Management said its index of national factory activity fell to 50.6 from 50.9 in July, according to Reuters.
Economists, on average, now see 93,000 nonfarm payrolls created in August, the Journal adds.
If Goldman Sachs is accurate, a gain of 25,000 would be well below the Labor Department's official figure of 117,000 for July.
The median forecast of economists surveyed by Dow Jones Newswires calls for a gain of 80,000 jobs in August.
Economists say the employment situation needs major improvement if the country is to see any significant economic recovery.
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