GOLDMAN: Here's One Reason Why The Jobs Report Could Be Great, And Another Why It Could Be A Disappointment

Friday is Jobs Day in America.

In a note to clients ahead of the report, Goldman Sachs’ David Mericle writes that the firm expects payrolls grew by 230,000 in December as the unemployment rate ticked down to 5.7%.

Wall Street expects payroll grew by 240,000 with the unemployment ticking down to 5.7%. 

Of the various indicator Mericle takes stock of ahead of the report, one in particular argues for a stronger than expected jobs report while another points to a weaker report. 

Mericle:

Arguing for a stronger report:

  • Job availability. The Conference Board’s labour differential — the net per cent of households reporting jobs as plentiful vs. hard to get — improved by 1.9pt in December to -10.6.

Arguing for a weaker report:

  • Jobless claims. The four-week moving average of initial jobless claims leading into the payroll reference week rose 11k to 299k.

Mericle, like Brian Jones at Societe Generale, expects that any weather impacts on the payrolls report is likely to be positive. 

On the whole, Mericle said that “labour market indicators looked somewhat softer in December, but remain consistent with a solid trend rate of employment growth.”

In November, the jobs report was a total blowout, as payroll gains came in at 321,000 against expectations for 230,000. 

And the big streak on the line is the economy’s 10-month streak of job gains over 200,000, which both Goldman and Wall Street consensus are expecting. 

As always, Business Insider will have complete coverage of the report on Friday morning. 

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