Preview of the employment report

Analysts at Nomura offered a preview of the employment report.

Key Quotes:

"We forecast that nonfarm payrolls increased by 160k in November, comparable with the gains seen in October.

We expect a modest rise of 5k in government payrolls, implying that private payrolls increased by 155k. Incoming data on the labor market, for the most part, imply steady employment activity with limited involuntary layoffs in November. We see some upside risk to our below-consensus forecast from two sources.

First, the ADP employment report showed that private payrolls grew by 216k in November, well above market expectations (Nomura: 155k, Consensus: 170k). The strong ADP employment figure could portend to a better-than-expected nonfarm payrolls number on Friday.

Second, in the past, the payrolls figures have suffered from residual seasonality during the holiday period. With more consumers opting to do their holiday shopping online rather than at brick-and-mortar stores seasonal hiring patterns have been much more pronounced in the couriers and delivery service sector. Residual seasonality has been diminishing as the seasonal adjustment process has responded to the new pattern.

However, we still find some residual seasonality in the data and we may still see some upward bias in November and December. Elsewhere, we expect the unemployment rate to decline further to 4.8% in November. On wages, we expect growth in average hourly earnings to slow to 0.1% m-o-m (2.7% y o-y) following a sharp increase of 0.4% m-o-m in the previous month.

We think that the prior month’s strong wage growth was artificially amplified by inclement weather holding down the average weekly hours worked during the survey reference period. To that end, we think that some payback is warranted in November as conditions returned back to normal."

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.