After witnessing a couple of months of positive US labor market gains, the economists contributing to the NFP forecast report remain divided on the direction in which US employment moved in November.
The majority opts for a result in the range of 101-150K, which is considerably below the previous reading of 171K. They also believe the unemployment rate should stay unchanged at 7.9% or tick up slightly to 8%.
Three of the contributing analysts believe that we will see a more substantial increase in US employment in November, in the average range of 151-200K. Steve Ruffley, who holds the most bullish view – of a 160-215K rise – believes that the overall trend on the US labor market suggests that "we will see a strong figure." He adds that "any where above 200k jobs added should being the overall unemployment rate down."
Illian Yotov's forecast is the most pessimistic of all: "A couple of months of upbeat labor market data, which has lightened the mood ahead of the U.S. election, could be followed by a gloomy NFP report with a month of dismal job creation as the U.S. economy adds only 25K jobs in November."
The US Nonfarm payrolls report will be published on December 7 at 13:30 GMT. Read below the entire commentaries from the contributing analysts.
"For once I am going to be bullish on the NFP. Even after taking into account the knock on effects of hurricane Sandy the. overall trend indicates to me that we will see a strong figure I will put a range of 160k on the low side to a high of 215k. Any where above 200k jobs added should being the overall unemployment rate down.
We have a steady rise in the US markets over the last 6 months and every time there has been a correction the markets have been pretty quick to recover. We have seen good support in the S&P 1373.45 and on the back of a good NFP we could see the S&P hitting the highs of the 1474.50. Even if the figure is not above 200k, if it is steady and relatively in line with the ‘market expectations’ I would be buying into and short term down moves."
"A couple of months of upbeat labor market data, which has lightened the mood ahead of the U.S. election, could be followed by a gloomy NFP report with a month of dismal job creation as the U.S. economy adds only 25K jobs in November compared with 171K in October, while the unemployment rate climbs back to 8.0% from 7.9%. The greenback could come under pressure if deteriorating job market conditions raise the odds of an expansion of the Fed's QE operations in 2013."
"If it were not for the hurricane that hit the northern east coast of the US, we would be confident that non-farm payrolls have had accelerated their pace of increase in November. Excluding this, we would expect monthly job creations of about 170k over the month. As employees have to be off work without pay for the entire pay period to be excluded from non-farm employment data, and having in mind that Sandy destroyed more residential structures than production facilities, the published number is likely not to be that different from our expectations. As for putting the unemployment rate on a sustained downward path, it should remain insufficient, and we expect the unemployment rate to have remained at 7.9%. The US population is currently increasing by an average 200k per month. As for now, because of tight conditions on the labour market, the civilian labour force is increasing more slowly. However, any improvement in job creations will lead to increase the labour force participation ratio, hence the need for job creations. In short, non-farm payrolls will soon need to grow by at least 200k per month just to stabilise the unemployment rate. Any figure below that level will thus disappoint Fed members…"
"Another rather positive gain in jobs can be expected given recent data. On one hand, expectations will be based on more data this time, such as the ISM Non-Manufacturing PMI. On the other hand, the data might be affected by super-storm Sandy, so it could be taken with a grain of salt by traders. A significant rise in jobs, above 200K, will likely not be accompanied with a significant drop in the unemployment, as there are many discouraged workers that me be trying their luck once again, enlarging the workforce. A gain of 150K and the same 7.9% unemployment rate can be expected.
Contrary to the previous report that preceded the elections, this one precedes the Fed meeting, that could decide on more easing. So, a positive report is expected to strengthen the dollar on lower chances of more easing, and a bad report could weaken the greenback on higher chances for easing. We could see a return to normal reactions instead of the risk on / risk off behavior."
"The next NFP reading will be interesting. We will see to what degree hurricane Sandy lowered the increase in jobs. Let’s remember, that it affected the weekly unemployment claims. In general, I would expect a number much lower than the previous reading of +171K, and in my opinion it will be in the 100-130 range. Unemployment rate should not be affected and should remain in the 7.9% - 8.0% range."
"Non-farm employment change data is to be announced on 07th December by 13:30 GMT. The number may be slightly lesser than expectation around 130-160 K when compared with previous number of 171k.There may not be any change in unemployment rate. Average hourly earnings may be slightly increased.
On that day EURO and GBP are expected to make a rise before NFP and drop quickly after NFP data release. During US session they are expected to make very quick rise again for the week end."
"When it comes to the number of new jobs added, I'm expecting a slightly lower number than previous 171K. Not only due to the effects of hurricane Sandy, but also base on the weekly unemployment claims that rose strongly right after the elections were over, well above 400K. I would expect the economy to add around 120K new jobs, while with this figure, unemployment rate should remain unchanged around 7.9%."
"Looking at the current trend in non-farm payrolls we should expect an increase in job creation again in November, around 150K. Regarding unemployment rate, we should remember that its value depends not only on payrolls, but also on labor force so it's difficult to get an estimate; anyway expect a value around 8.0%, probably slightly below. "
The majority opts for a result in the range of 101-150K, which is considerably below the previous reading of 171K. They also believe the unemployment rate should stay unchanged at 7.9% or tick up slightly to 8%.
Three of the contributing analysts believe that we will see a more substantial increase in US employment in November, in the average range of 151-200K. Steve Ruffley, who holds the most bullish view – of a 160-215K rise – believes that the overall trend on the US labor market suggests that "we will see a strong figure." He adds that "any where above 200k jobs added should being the overall unemployment rate down."
Illian Yotov's forecast is the most pessimistic of all: "A couple of months of upbeat labor market data, which has lightened the mood ahead of the U.S. election, could be followed by a gloomy NFP report with a month of dismal job creation as the U.S. economy adds only 25K jobs in November."
The US Nonfarm payrolls report will be published on December 7 at 13:30 GMT. Read below the entire commentaries from the contributing analysts.
Steve Ruffley – Owner of Tradermaker.com:
"For once I am going to be bullish on the NFP. Even after taking into account the knock on effects of hurricane Sandy the. overall trend indicates to me that we will see a strong figure I will put a range of 160k on the low side to a high of 215k. Any where above 200k jobs added should being the overall unemployment rate down. We have a steady rise in the US markets over the last 6 months and every time there has been a correction the markets have been pretty quick to recover. We have seen good support in the S&P 1373.45 and on the back of a good NFP we could see the S&P hitting the highs of the 1474.50. Even if the figure is not above 200k, if it is steady and relatively in line with the ‘market expectations’ I would be buying into and short term down moves."
Ilian Yotov - FX Strategist and Founder at AllThingsForex:
"A couple of months of upbeat labor market data, which has lightened the mood ahead of the U.S. election, could be followed by a gloomy NFP report with a month of dismal job creation as the U.S. economy adds only 25K jobs in November compared with 171K in October, while the unemployment rate climbs back to 8.0% from 7.9%. The greenback could come under pressure if deteriorating job market conditions raise the odds of an expansion of the Fed's QE operations in 2013."Alexandra Estiot - Senior Economist at BNP Paribas:
"If it were not for the hurricane that hit the northern east coast of the US, we would be confident that non-farm payrolls have had accelerated their pace of increase in November. Excluding this, we would expect monthly job creations of about 170k over the month. As employees have to be off work without pay for the entire pay period to be excluded from non-farm employment data, and having in mind that Sandy destroyed more residential structures than production facilities, the published number is likely not to be that different from our expectations. As for putting the unemployment rate on a sustained downward path, it should remain insufficient, and we expect the unemployment rate to have remained at 7.9%. The US population is currently increasing by an average 200k per month. As for now, because of tight conditions on the labour market, the civilian labour force is increasing more slowly. However, any improvement in job creations will lead to increase the labour force participation ratio, hence the need for job creations. In short, non-farm payrolls will soon need to grow by at least 200k per month just to stabilise the unemployment rate. Any figure below that level will thus disappoint Fed members…" Yohay Elam - Analyst at Forex Crunch:
"Another rather positive gain in jobs can be expected given recent data. On one hand, expectations will be based on more data this time, such as the ISM Non-Manufacturing PMI. On the other hand, the data might be affected by super-storm Sandy, so it could be taken with a grain of salt by traders. A significant rise in jobs, above 200K, will likely not be accompanied with a significant drop in the unemployment, as there are many discouraged workers that me be trying their luck once again, enlarging the workforce. A gain of 150K and the same 7.9% unemployment rate can be expected.Contrary to the previous report that preceded the elections, this one precedes the Fed meeting, that could decide on more easing. So, a positive report is expected to strengthen the dollar on lower chances of more easing, and a bad report could weaken the greenback on higher chances for easing. We could see a return to normal reactions instead of the risk on / risk off behavior."
Adam Narczewski - Financial Analyst at X-Trade Brokers, XTB:
"The next NFP reading will be interesting. We will see to what degree hurricane Sandy lowered the increase in jobs. Let’s remember, that it affected the weekly unemployment claims. In general, I would expect a number much lower than the previous reading of +171K, and in my opinion it will be in the 100-130 range. Unemployment rate should not be affected and should remain in the 7.9% - 8.0% range."Dr. S. Sivaraman - CEO and owner of i-knowindices.com:
"Non-farm employment change data is to be announced on 07th December by 13:30 GMT. The number may be slightly lesser than expectation around 130-160 K when compared with previous number of 171k.There may not be any change in unemployment rate. Average hourly earnings may be slightly increased.On that day EURO and GBP are expected to make a rise before NFP and drop quickly after NFP data release. During US session they are expected to make very quick rise again for the week end."
Valeria Bednarik - Chief Analyst with FXstreet.com:
"When it comes to the number of new jobs added, I'm expecting a slightly lower number than previous 171K. Not only due to the effects of hurricane Sandy, but also base on the weekly unemployment claims that rose strongly right after the elections were over, well above 400K. I would expect the economy to add around 120K new jobs, while with this figure, unemployment rate should remain unchanged around 7.9%." Alberto Muñoz - Forex Analyst at FXstreet.com:
"Looking at the current trend in non-farm payrolls we should expect an increase in job creation again in November, around 150K. Regarding unemployment rate, we should remember that its value depends not only on payrolls, but also on labor force so it's difficult to get an estimate; anyway expect a value around 8.0%, probably slightly below. "
