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5 Feb 2016
US: January employment preview – Nomura
Research Team at Nomura, expect the BLS to report that nonfarm payrolls grew by 185k workers in January, slightly below the Consensus call of 190k.
Key Quotes
“Our forecast, if realized, would be a step down in the pace of job growth from the Q4 average of 284k workers per month but still consistent with a US labor market that is growing near trend. We forecast that private payrolls increased by 180k, implying that the government sector added only 5k workers in January. We believe some of the public sector job gains in late 2015 were due to stronger demand for postal service workers during the holiday season and should return to a more modest pace of hiring.
Incoming data continue to suggest that the manufacturing sector remains hampered by weakening demand due to lower oil prices and the stronger dollar while the rest of the economy is more resilient. As such, we expect manufacturing payrolls to recede by 5k jobs and the bulk of the job gains to come from the service providing sector. Furthermore, it appears that construction activity remained elevated in late 2015 due to warmer-than-usual weather. With weather conditions reverting closer to norms, we see risk for some negative payback in construction sector payrolls.
Although the unemployment rate leveled off at 5.0% the last three months, on an unrounded basis, it continued to trend lower. We believe that the unemployment rate will inch down enough to push the official unemployment rate to 4.9%. Last, we expect average hourly earnings to rebound by 0.31% m-o-m (2.25% y-o-y) after declining slightly in December. A calendar quirk, in which there are fewer working days during the BLS survey reference pay period, favors a pickup in wage growth.”
Key Quotes
“Our forecast, if realized, would be a step down in the pace of job growth from the Q4 average of 284k workers per month but still consistent with a US labor market that is growing near trend. We forecast that private payrolls increased by 180k, implying that the government sector added only 5k workers in January. We believe some of the public sector job gains in late 2015 were due to stronger demand for postal service workers during the holiday season and should return to a more modest pace of hiring.
Incoming data continue to suggest that the manufacturing sector remains hampered by weakening demand due to lower oil prices and the stronger dollar while the rest of the economy is more resilient. As such, we expect manufacturing payrolls to recede by 5k jobs and the bulk of the job gains to come from the service providing sector. Furthermore, it appears that construction activity remained elevated in late 2015 due to warmer-than-usual weather. With weather conditions reverting closer to norms, we see risk for some negative payback in construction sector payrolls.
Although the unemployment rate leveled off at 5.0% the last three months, on an unrounded basis, it continued to trend lower. We believe that the unemployment rate will inch down enough to push the official unemployment rate to 4.9%. Last, we expect average hourly earnings to rebound by 0.31% m-o-m (2.25% y-o-y) after declining slightly in December. A calendar quirk, in which there are fewer working days during the BLS survey reference pay period, favors a pickup in wage growth.”