US Dollar: Data distortions cloud labour signals – ABN AMRO

ABN AMRO’s Group Economics highlights that the brief US government shutdown has delayed key labour and inflation data, with methodological changes set to distort January readings. Analysts expect the unemployment rate to hold at 4.4% and Nonfarm Payrolls at 50k, while headline and core CPI are forecast at 0.3% m/m and 2.5% y/y before re-accelerating later.

US labor market and inflation insights

"Due to the short government shutdown, the labour market report has been postponed until next week Wednesday. The report will be affected by methodological updates. The household survey will incorporate new census details, leading to a substantial drop in employment and the labour force in January."

"We expect the unemployment rate to remain at 4.4%. Non farm payrolls will also be influenced by an update to the birth–death model. We expect payrolls to come in lower as a result, though with reduced risk of future negative revisions. For this Friday, we expect a 50k reading."

"The CPI report is also delayed, and will now be released next Friday. We expect both headline and core inflation to come in at 0.3% m/m, dropping both y/y rates at 2.5% due to favourable base effects. It is likely to pick up again over the coming months."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)