NFP Preview: Next few months will be critical for the labor market’s recovery – Wells Fargo

Next week, the US official employment report will be released. Analysts at Wells Fargo expect a reading of 425K in non-farm payrolls, below the 500K of market consensus. 

Key Quotes: 

“Over March and April, the U.S. economy lost about 22 million jobs. Since then, about 12 million jobs have been created, for a net loss of about 10 million jobs, or 6.6% of February’s total employment. The more volatile household survey on which the unemployment rate is based offers a more optimistic picture, with about 25.4 million jobs lost over March and April and 16.4 million jobs created since then.”

“The next few months will be critical for the labor market’s recovery. With a vaccine finally in sight, life may begin to return to normal by next summer. However, with new COVID cases elevated headed into the holiday season, and with many states imposing new restrictions on private activity, the next few months could be an especially tough stretch for the economy. Even if monthly nonfarm payroll growth is “only” a few hundred thousand for the next few months, avoiding negative readings could help get us to another employment growth “bump” post-vaccine.”