A couple of takes on tonight’s all important US employment numbers. From Calculated Risk:
In October I was looking for an Upside Payroll Surprise. For November, my guess is closer to the consensus forecast of 180,000 payroll jobs added. The consensus is for the unemployment rate to decrease to 7.2% in November from 7.3% in October.
The October employment report was impacted by the government shutdown, and the unemployment rate increased in October to 7.3% from 7.2% in September. Even worse, the participation rate declined sharply in October to 62.8% from 63.2% in September. One of the keys for the November report will be if those ugly October numbers are reversed.
…Conclusion: As usual the data was mixed. The ADP report was higher in November than in October, however the ISM surveys suggest a slower increase in payrolls. Weekly claims for the reference week were at the lowest level this year excluding September when there were computer issues (the reference week includes the 12th of the month), and consumer sentiment increased (recovering from government shutdown). Also the Intuit small business index showed a pickup in hiring.
There is always some randomness to the employment report. My guess is the report will be close to the consensus forecast of 180,000 nonfarm payrolls jobs added in November.
Also from Goldman:
We expect a 175k gain in both nonfarm payrolls and private payrolls in November, a bit below consensus expectations of 185k and a modest slowdown from the 204k gain seen in October…We expect that the unemployment rate will decline to 7.1% in November, reflecting both employment gains and the possibility that some of the decline in participation seen in October’s distorted household survey will persist this month.
And Merrill Lynch:
We are looking for job growth of 175,000 in November, a slight slowdown from the 204,000 pace in October. The unemployment rate should fall to 7.2% from 7.3% while the workweek holds steady at 34.4 hours. … Looking back at the recent history, when Thanksgiving is late in the month, there seems to be a downward bias in retail jobs in November and a reversal in December. The reverse is the case when the Thanksgiving holiday is early in the month, as it was last year. This could account for a swing of as many as 40,000 jobs. … The household survey was distorted in the October report, leading to a sharp decline in the labor force and in the number of employed workers. This bias will be reversed in November as people returned to work after the shutdown. We therefore expect the participation rate to jump back to 63.1%, nearly returning to the September pace.
A consensus then! If they are tight it is not strong enough for DecTaper in my view.
