Goldman Sachs lowered its estimate for tomorrow’s key job report

Goldman Sachs lowered its estimate for tomorrow’s key job report following this morning’s ISM data. In a note to clients, chief U.S. economist Jan Hatzius reduced the firm’s August non-farm payroll estimate to 25,000 from 50,000.

The Goldman economist explained that “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. Layoffs seem to have remained low, given steady jobless claims in the 410,000 range, although even here the recent pickup in layoff announcements is a concern.”

Heading into today, the consensus estimate among economists for the jobs report was 75,000 non-farm payrolls added. If the data comes in below consensus – as Goldman now believes – the price of gold is likely to benefit.

The gold price oscillated near $1,830 per ounce Friday morning, trading near unchanged on the day. After sliding off its $1,913 all-time high posted on Aug 22, the price of gold has been held in check under $1,850 as investors and traders weigh whether a deeper correction is in the offing.