by Calculated Risk on 9/04/2014 03:31:00 PM

Friday at 8:30 AM ET, the BLS will release the employment report for August. The consensus, according to Bloomberg, is for an increase of 230,000 non-farm payroll jobs in August (range of estimates between 195,000 and 279,000), and for the unemployment rate to decline to 6.1% from 6.2% in July.

Here is a summary of recent data:

• The ADP employment report showed an increase of 204,000 private sector payroll jobs in August. This was below expectations of 213,000 private sector payroll jobs added. The ADP report hasn't been very useful in predicting the BLS report for any one month, but in general, this suggests employment growth slightly below expectations.

• The ISM manufacturing employment index decreased slightly in August to 58.1%. A historical correlation between the ISM manufacturing employment index and the BLS employment report for manufacturing, suggests that private sector BLS manufacturing payroll jobs increased about 25,000 in August. The ADP report indicated a 23,000 increase for manufacturing jobs in August.

The ISM non-manufacturing employment index increased in August to 57.1%. A historical correlation between the ISM non-manufacturing employment index and the BLS employment report for non-manufacturing, suggests that private sector BLS non-manufacturing payroll jobs increased about 260,000 in August.

Combined, the ISM surveys suggest about 285,000 payroll jobs added in August (note that the ISM diffusion indexes are based on number of firms, not employees - and the timing is different).

• Initial weekly unemployment claims averaged close to 300,000 in August, down from 302,000 in July. For the BLS reference week (includes the 12th of the month), initial claims were at 299,000; this was down from 303,000 during the reference week in June.

The slightly lower reference week reading suggests slightly fewer layoffs in August than in July.

• The final August Reuters / University of Michigan consumer sentiment index increased to 82.5 from the July reading of 81.8. This is frequently coincident with changes in the labor market, but there are other factors too - like lower gasoline prices.

• On small business hiring: The small business index from Intuit showed a 0.01% increase in small business employment in August (hours worked increase sharply in the Intuit index).

• Conclusion: The ADP report was lower in August than in July - and slightly below forecasts.  The ISM indexes were strong, and suggest hiring above the forecasts. Weekly unemployment claims were at the lowest level during the reference period in a number of years. However the Intuit small business index showed less hiring in August.

There is always some randomness to the employment report, but I expect the BLS will report over the consensus of 230,000 nonfarm payrolls jobs added in August.