With only three days left before the mammoth jobs report, economists are making their final tweaks to forecasts.But Joseph LaVorgna, chief economist at Deutsche Bank, isn’t tempted to touch his prediction, he writes in a new note out this afternoon.
LaVorgna is predicting private payrolls will increase 270,000 in February, while the headline figure gains 255,000. The Street is currently modelling for a 210,000 increase for total nonfarm payrolls.
“Given that the standard error on a simple regression model between the two series is 92k, we would probably need to see a one and a half standard deviation miss (138k) in our ADP forecast for us to change our payrolls projections,” he says. “Remember that last month ADP was reported at +170k and yet private payrolls came in at +257k, just within one standard error. Consequently, we should be careful to not overreact to noise in the data.“
Last month total payrolls increased by 243,000, which largely beat economist expectations. The Bureau of labour Statistics will release February results on Friday morning at 8:30 a.m. EST.
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