NFP Preview: Forecasts from 10 major banks, further significant job growth

The US Bureau of Labor Statistics (BLS) will release the October jobs report on Friday, November 4 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 10 major banks regarding the upcoming employment data.

Expectations are for a 200K rise in Nonfarm Payrolls following the 263K increase in September while the US Unemployment Rate may increase to 3.6% from 3.5% prior.

Commerzbank

“We expect job creation of 220K. The unemployment rate is likely to rise slightly to 3.6% after the unexpectedly sharp decline in September.”

SocGen

“For October, we expect NFP to rise by 300K, faster than the 263K reported in September. Payrolls grew an average of 562K per month in 2021 and in the first half of 2022 they grew at a 444K pace. The unemployment rate is expected to hold steady at 3.5%, but we view a further decline to 3.4% as highly likely very soon. With employment gains above a 150-175K range per month, there is pressure for the unemployment rate to drop. We estimate the 150-175K pace as representing growth in the working-age population.”

Deutsche Bank

“The headline consensus is at +190K (DB at +225K vs. +263K previously) with private at +195K (DB at +225K vs. +288K previously). We expect the unemployment rate to stay at 3.5% but the consensus expects it to tick up to 3.6%. Average hourly earnings are expected by the street to dip from 5% to 4.7% (DB at 4.6%).”

Danske Bank

“We expect to see relatively strong jobs report with another 220K employed.”

NBF

“Hiring could have slowed down in the month if previously released soft indicators such as S&P Global’s Composite PMI are any guide. Layoffs, meanwhile, could have stayed very low judging by the level of initial jobless claims. With these two trends cancelling each other, payroll growth could come in at 175K. The household survey is expected to show a similar gain, a development which could leave the unemployment rate unchanged at 3.5%, assuming the participation rate stayed put at 62.3%.”

RBC Economics

“We expect employment growth will likely lose more momentum October. We expect a 150K increase in jobs alongside a tick higher in the unemployment rate, but to a still low 3.7%.”

CIBC

“The jump in initial jobless claims early in October included the impact of Hurricane Ian, and claims remained elevated into the payrolls survey reference week, suggesting that hiring could have cooled to a 175K pace. That’s also consistent with the deterioration seen in the Conference Board’s labor differential, the softening in job openings in recent months, and caution amongst businesses as the demand outlook has dimmed. Moreover, with the prime-age participation rate hovering around its pre-pandemic level, there is little room for continued, outsized job gains. That would likely leave the unemployment rate a tick higher at 3.6%. We’re slightly below the consensus, which could nudge bond yields and the USD lower.”

Citibank

“US October Nonfarm Payrolls – Citi: 190K, prior: 263K; Private Payrolls – Citi: 170K, prior: 288K; Average Hourly Earnings MoM – Citi: 0.4%, prior: 0.3%; Average Hourly Earnings YoY – Citi: 4.7%, prior: 5.0%; Unemployment Rate – Citi: 3.5%, prior: 3.5%. Employment growth in recent months is slowing back towards pre-pandemic pace (100-300K per month). We expect further slowing into next year with monthly job losses as demand cools further.”

Wells Fargo

“While overall growth prospects have weakened considerably, we expect employers to continue to hire at a solid pace in the near term and forecast payrolls to increase by 190K in October. We anticipate the unemployment rate will hold steady at 3.5% in October and look for average hourly earnings to rise 0.3% over the month.”

TDS

“We look for slowing job growth in the October labor market report from 263K in September to 220K. The unemployment rate likely rose from 3.5% previously to 3.7%.”