This afternoon at 1:30PM we get arguably the biggest economic data point of the month when the US non-farm payrolls are released at 1:30PM (GMT). The non-farm employment change is called to come in at 179k according to median forecasts from economists, up from 155k last month. Yesterday’s ADP employment change came in well above forecasts of 179k at 271k and may well have ramped up expectations further ahead of today’s release. Perhaps more important than the headline employment change will be average earnings, which are forecast to come in at 0.3% M/M (0.2% prior) and 3.0% Y/Y (3.1% prior).
Below are selected comments from major banks previewing the event:
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“Nonfarm payroll growth slowed down to 155K in November and markets are expecting an acceleration. The Bloomberg consensus for December is 184K, although we should keep in mind that the survey was largely taken before the release of yesterday’s ADP figure that beat market expectations by a large margin. Therefore, markets may now be expecting more than the 184K reported by Bloomberg.”
“The unemployment rate is expected to remain unchanged at 3.7%. Although that is well below the Fed’s estimate of the NAIRU of 4.4%, wage growth is still modest. In fact, average hourly earnings growth is expected to slow down to 3.0% in year-on-year terms, from 3.1%. Note that due to base effects, average hourly earnings growth is set to fall unless we see a substantial rise in month-on-month earnings growth.”
Standard Chartered
“The December employment situation report is likely to indicate ongoing labour-market strength in contrast to recent financial-market weakness.”
“We expect a near-200,000 headline print, a possible modest downtick U-3 or a modest uptick in the labour participation rate, and average hourly earnings (AHE) growth above 3% y/y.”
National Bank Financial
“Jobless claims remained extremely low in the month, pointing to a very low rate of layoffs. Hiring, meanwhile, may have picked up a little from the prior month’s tepid pace, in line with what was reported in the Empire State and Philly Fed manufacturing surveys. Accordingly, we’re calling for a +175K print. The unemployment rate, for its part, may stay put at 3.7% if, as we believe, the household survey shows a modest increase in employment following three stellar months.”
TD Securities
“In the context of pessimistic market sentiment, we expect a payrolls rebound to 190k for December to be interpreted as slightly hawkish. Surveys published so far suggest payrolls likely remained firm, which should keep the unemployment rate unchanged at 3.7%. We also anticipate wages to rise 0.3% m/m, bringing the annual print slightly down to 3.0%.”
Nomura
“Employment components of the latest regional surveys and initial claims data suggest labor demand remains strong. We expect some payback from a softer-than-expected 155k NFP gain in November and are expecting a reading of 200k in December.”
“We expect 0.3% m/m and 3.0% y/y average hourly earnings. Unemployment rate at 3.6%. Altogether, we expect the December employment report to remind markets that the US growth outlook remains stable despite financial market volatility.”
ING
“James Knightley, a chief international economist at ING, suggests that after the US non-farm payrolls rose a slightly disappointing 155,000 in November, they are expecting to see December payrolls growth coming in at around 165,000 versus the 180,000 market consensus. ING’s Knightley expects wages to rise 3.1% over the year and the unemployment rate to reach 3.7% in December.”
