Non-Farm Payrolls Preview: Nine major banks expectations for September jobs report

This Friday, the US jobs report for September, due out at 12:30 GMT, is projected to report an increase of 850,000 jobs and a drop in the unemployment rate to 8.2%. That would be a slower pace of restoration, yet still a substantial increase in absolute terms. As we get closer to that time, here are the expectations forecast by economists and researchers of nine major banks regarding the upcoming employment data. Most of the market specialists are expecting US NFP to post-reading in between +400K and +1,200K million in September. 

Goldman Sachs

“We expect the headline NFP to rise as 1,100K versus the previous 1,371K while the Unemployment Rate is anticipated to slip from 8.4% prior to 8.1%.”

Wells Fargo

“We look for nonfarm employers to add a net 820K jobs in September. If our call is realized, employment would still be 7.0% below its pre-pandemic level. Even though the unemployment rate fell more than expected in August, we look for it to decline again in September to 8.2%.”

CIBC

“While data on shifts worked in September still suggest that hiring continued in the US labor market on the month, it appears to have slowed further as fewer social distancing restrictions remained to be eased in many states. It’s therefore likely that job creation slowed to a 650K pace on the month, reflecting hiring in the education sector as well as a further rebound in manufacturing payrolls. We also anticipate a rise in the labor force participation rate as federal government unemployment benefits evaporated, leading to a gentler drop in the unemployment rate, to 8.2%.” 

Westpac

“Employment growth is expected to remain strong in September at around 950K. However, combined with a partial recovery in participation, such a gain is unlikely to drive the unemployment rate materially lower. As this recovery matures, progress towards 'full employment' will become more and more difficult. In assessing the outlook for wages, it is also important to recognise that underemployment remains historically elevated as well. As a result, we have to expect a lengthy period of modest wage inflation, at best.”

ING

“We look for payrolls growth of 850K with the unemployment rate only moving slightly lower as job gains are offset by a rising participation rate. We would just caution that there could be some additional downside risk from the confusion over in-person and remote schooling. With many parents having to stay at home as remote schooling continues in many parts of the country this could further constrain jobs growth.”

RBC

“Friday’s US labour market report is expected to show further gains in employment, we are expecting a rise of 1200K. Though that would still leave the number of jobs lost at more than 10 million from February. We are expecting the unemployment rate to dip lower again to 7.6%.”

NBF

“Hiring should have continued apace in the month judging from a decline in continuing claims between the August and September reference periods, a development that may have translated into an 800K increase in payrolls. The household survey is expected to show a smaller progression in employment which would be consistent with a decrease in the unemployment rate to 8.2%.”

TDS

“We forecast a below-consensus 400K rise in payrolls, down from 1.4M in August, 1.7M in July and 4.8M in June. We expect the downtrend in the unemployment rate to stall, with relatively modest employment growth offset by a rise in the participation rate as active job searching among laid-off individuals picked up. Average hourly earnings likely continued to show a net pickup due to mix shifts— with more net weakening in low-wage than high-wage jobs boosting the average level; the 12-month change was around 3% through February.” 

Deutsche Bank

“Our US economists think that Nonfarm Payrolls will grow by another +800K in September (consensus +875K), which should be enough to lower the unemployment rate to 8.2% from 8.4%. Remember, however, that even if this were realised, Nonfarm Payrolls would still be over 10M beneath their peak back in February, so there’s still a long way to go before we get back to pre-coronavirus levels of employment.”