NFP Preview: Forecasts from nine major banks, employment trend slows down

The US Bureau of Labor Statistics (BLS) will release the September jobs report on Friday, October 7 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of nine major banks regarding the upcoming employment data.

Economists expect a slowdown in US job growth to 250K in September following the 315K increase in August. Meanwhile, the Unemployment Rate is expected to remain steady at 3.7%.

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 may also have eased judging from a decrease in initial jobless claims. With these two trends cancelling each other, payroll growth come in at a still decent 250K. The household survey is expected to show a smaller gain, a development which could nonetheless leave the unemployment rate unchanged at 3.7%, assuming the participation rate stayed put at 62.4%.”

Commerzbank

“We expect the labor market to continue to lose momentum only slowly and, from the Fed's perspective, to probably still be too strong. Thus, we forecast a job gain of 280K, after 315K in August. The unemployment rate is likely to remain at an extremely low 3.7%.”

CIBC

“Early indications of the health of the US labor market in September suggest that hiring continued at a brisk pace, with 240K jobs likely added. That’s consistent with the improvement seen in initial jobless claims and the Conference Board’s labor differential measure. While that pace of hiring would typically cause the unemployment rate to fall, there is still room for participation gains in the prime-age group, and the unemployment rate could have remained at 3.7% with some increase in participation. We’re not far enough from the consensus to see a material market reaction.”

SocGen

“We project a 280K gain. The unemployment rate for September is expected to decline to 3.6% from 3.7% in August. The monthly flows are volatile. If there are no returnees, or if there is a net exodus from the labor force rather than re-entrants, the unemployment rate could drop even more than the 3.6% we project. Wages are expected to rise 0.5% MoM in September. We view the shortfall seen in August, when wages rose 0.3%, as noise in the data rather than the beginning of a new trend.” 

Citibank

“US September Nonfarm Payrolls – Citi: 265K, prior: 315K; Private Payrolls – Citi: 245K, prior: 308K; Average Hourly Earnings MoM – Citi: 0.4%, prior: 0.3%; Average Hourly Earnings YoY – Citi: 5.1%, prior: 5.2%; Unemployment Rate – Citi: 3.6%, prior: 3.7%. An overall slowing trend in monthly payroll growth should continue in September and as the Fed acts to weigh on activity, slowing job growth into 2023 will likely also reflect falling demand for labor and likely job losses. The change in the unemployment rate will also be one of the most important aspect of the jobs report. We expect the unemployment rate to decline modestly to 3.6% but with risk that it remains at 3.7%.” 

ING

“We for a solid 200K increase in jobs and the unemployment rate staying low at 3.7% – both pointing to another 75 bps hike from the Federal Reserve on 2 November.” 

Wells Fargo

“We look for another solid 275K increase. Another sizable increase in labor force participation would be a welcome development for Fed officials as they attempt the high wire act of bringing labor supply and demand into a healthy balance.”

TDS

“We expect more moderation in payrolls in September to 300K, which still represents a strong pace of job growth. We look for this still very solid gain in employment to also be reflected in a decline in the unemployment rate to 3.6%.”

Barclays

“We expect 250K in NFP, steady unemployment and participation rates, and average hourly earnings to move up 0.4% MoM (5.0% YoY). A strong report could drive the market to fully price a 75 bps rate hike in November, expectations of which had declined recently, and this would further support the dollar.”