US nonfarm payrolls to advance by 175k in November

Analysts at TDS expect US nonfarm payrolls to advance by 175k in November as data on persons not at work due to bad weather suggest that hurricane impacts should have faded by this month, allowing payrolls to print closer to their current trend in the 150-200k range.

Key Quotes

“Upward revisions to the prior two months are also likely. Meanwhile, labor market indicators (ISM, regional Fed surveys, and consumer confidence) remained supportive of solid job gains in November. We lean toward a print below 200k, consistent with the slowing trend in job growth and the level of labor market tightness.”

“We expect the unemployment rate to tick higher to 4.2% from 4.1%, given the outsized decline in labor force participation that has the potential to correct. We also look for a relatively modest 0.2% m/m increase in average hourly earnings, as calendar effects are less favorable this month. That should leave earnings tracking higher on a y/y basis at 2.6% vs 2.4%, though likely to the disappointment of markets with consensus calling for a 2.7% pace.”

“Foreign Exchange

The dollar comes into the November NFP release on a hot streak, recouping nearly half the move from the October highs. While the move is likely rooted in the rise of USD funding costs, we believe the November NFP release will act a crucial near-term pivot point. This reflects the offsetting factors driving the G10 space at the moment, with the dollar pricing in a lot of the good risks like tax policy, data momentum, and a Dec Fed hike. The negatives include political uncertainty, the potential for a government shutdown, and risk that the tax plan doesn’t get inked until next year.
This leaves the data to set the tone and we look for a miss on both headline job growth and wages. A 1.5-sigma miss on wages has been worth around a 0.4% knee-jerk drop in the BDXY, which has also translated into further declines in the subsequent six days. A double-whammy of weaker job growth and softer wages could, in turn, stall the rally in the greenback, especially since the recent string of good data has been one of its crucial levels of support.”

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.