US NFP Preview: Forecasts from eight major banks, another healthy gain

The US Bureau of Labor Statistics (BLS) will release the January jobs report on Friday, February 3 at 13:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of eight major banks regarding the upcoming employment data.

Expectations are for a 185K rise in Nonfarm Payrolls following the 223K increase in December while the Unemployment Rate is expected to inch higher to 3.6% vs. 3.5% seen in December.

Commerzbank

“In December, more than 200K new jobs were created again in the US. However, there were some details in the employment report that point to a gradual weakening of the labor market. For example, the number of temporary workers shrank for the fifth month in a row, a trend previously seen only in the run-up to recessions. In addition, despite continued substantial job creation, the number of hours worked fell. We, therefore, expect job growth to decline further to 180K in January.”

Danske Bank

“We still expect relatively strong employment growth at 200K.”

TDS

“We project payroll gains to have stayed largely unchanged vs December, posting a still solid 220K increase in January. Both the unemployment rate and average hourly earnings should have remained steady: the former at a decades-low 3.5%, and the latter printing a 0.3% MoM gain. Following Powell's flip in script, the market is asymmetric around this number. That is, a positive surprise is not likely to materially derail risk sentiment, while an indication of softness will reinforce it. That's key for the USD and other FX baskets which have more closely aligned itself to equity dynamics. That could prevent the USD from sinking to new lows in the near-term. Ultimately, however, we expect to see dip buying interest in EURUSD towards 1.08.”

SocGen

“We expect another 205K gain and would view any gain above 150K as strong. We expect the unemployment rate to edge up to 3.6%.”

CIBC

“Total hiring likely slowed to a 170K pace in January. That’s still a healthy pace of job growth, and the recent softening in the prime-age labor force participation rate leaves room for solid hiring without putting more upwards pressure on wages. Assuming an increase in participation, the unemployment rate could have increased to 3.6%, while the outsized gain in the hiring on the household survey that was seen in December isn’t likely to have been repeated in January. We’re roughly in line with the consensus expectation, suggesting limited market reaction.”

RBC Economics

“US payroll employment likely continued to rise in January, although the 150K increase in payrolls we expect would be the smallest gain since a drop in December 2020. The labour market remains tight and layoffs are still very low. But the number of job openings has been edging lower and we look for a tick up in the unemployment rate to 3.6% from 3.5% in December.”

NBF

“Payroll growth could come in at 150K. The household survey is expected to show a similar gain. This development could leave the unemployment rate unchanged at 3.5%, assuming the participation rate stayed put at 62.3%.”

Citibank

“We expect a sizable 305K increase in January, with some strength due to more technical factors but still-solid underlying job growth. We expect a somewhat stronger 0.4% increase in average hourly earnings in January compared to December, with roughly balanced risks around our above-consensus forecast. We expect the unemployment rate to remain unchanged at 3.5%, although with some elevated uncertainty around components of the household survey in January.”