Investors await key US jobs report for clues on next rate move – business live

China’s August Caixin manufacturing PMI has come in ahead of expectations, picking up to 51.6 from 51.1 in July (where anything above 50 signals growth).

It supports the official PMI survey published on Thursday, which also signalled stronger-than-expected growth in China’s factories.

However Julian Evans-Pritchard, China economist at Capital Economics, says it’s not all good news for the world’s second largest economy:

Stronger manufacturing PMI readings for August suggest that industrial output remains resilient. However, momentum elsewhere in the economy has weakened.

We suspect that it is speculation over future capacity cuts that has pushed up metal prices and industrial production, rather than stronger underlying demand.

Indeed, investment growth has cooled recently and we anticipate a further slowdown as the impact of tighter monetary conditions continue to feed through. If we are right, then the current strength of industrial activity can’t be sustained for long.

Good morning, and welcome to our rolling coverage of the latest news from the world economy, the financial markets, the eurozone and business.

It’s that time again: non-farm payrolls day. At 13.30 BST we will get the August report on employment and wages, giving the latest snapshot of how well the US jobs market and wider economy are doing.

The official consensus among economists is for a 180,000 increase in jobs, following a 209,000 rise in July. Wage growth is expected to edge up to 2.6% from 2.5% previously.

However, a stronger-than-expected ADP jobs report earlier in the week is raising speculation the payrolls report could surprise on the upside. If that was the case, investors would be more willing to bet that the Federal Reserve will raise rates again before the end of the year.

CMC Markets’ Michael Hewson:

A decent payrolls number today would be the icing on the cake in a week that has seen some positive signs that the US economy may be in better shape that was previously thought prior to Jackson Hole.

Today’s US employment report is expected to see 180k jobs added in August, down from July’s 209k, however this week’s bumper ADP report has seen some estimates for today revised higher.

Of more importance will be how strong the wages numbers come in, given an unemployment rate of 4.3%. Annual hourly wage growth is currently 2.5%, a little on the weak side for an economy supposedly at full employment so a strong number here could increase the odds of another rate rise this year, most likely in December.

Of course a stronger report is not a foregone conclusion:

The other major focus of the day will be manufacturing PMIs from the eurozone and UK, providing the latest clues on the health of those economies:

• 09.00 BST Eurozone manufacturing PMI (August)

• 09.00 BST Italian GDP, final estimate (Q2)

• 09.30 BST UK manufacturing PMI (August)