The consensus for today’s jobs report is that U.S. companies added 215,000 nonfarm payrolls in June.
But of the 94 economists surveyed by Bloomberg, no one was more bullish than Societe Generale’s Brian Jones.
“Our analysis suggests that market participants should be prepared for fireworks ahead of Independence Day,” wrote Jones in his note to clients.
Jones expects us to learn that 290,000 payrolls were added during the month, helping to bring the unemployment rate down to 6.2%.
From his note:
Hiring pace expected to reaccelerate sharply in June: The recent saw-toothed pattern of net job gains probably continued in June. Indeed, nonfarm employers likely added 290,000 workers, well above the 217,000 positions created in May but only marginally eclipsing the 282,000 net new hires posted in April (see table below left). A variety of factors support our call for the largest payroll gain since the 360,000 leap recorded at the beginning of 2012. The average number of persons filing initial claims for unemployment insurance benefits contracted by 12,100 to 312,000 over the four weeks heading into the June establishment survey period. The total number of persons collecting unemployment insurance benefits under regular state programs likely contracted by 54,000 to 2.57 million between canvassing periods — the fewest since October 2007 — implying that a substantial number of those previously unemployed are finding work. The impressive breadth of hiring across private industries over the March-May span also points to a pick-up in headline payroll growth. The BLS’ three- month diffusion index rose by 2.9 percentage points to 71.8% in May, marking the largest job gains since the winter of 2012.
Weather should also provide a lift to job creation in the upcoming report. At 70.5oF, the mean temperature nationwide over the month-to-date period ended June 14th was almost ten degrees above the relevant prior-month span and 11⁄2 degrees above the seasonal norm. In producing our forecast, we have assumed that the number of persons unable to work because of bad weather in non-agricultural industries — our proxy for the impact of climatic conditions on the establishment survey — will print below the 26,000 mean posted over the 2004-13 period. Construction, leisure and hospitality hiring, in particular, should benefit from the warmer temperatures.
We’ll cover the release live at 8:30 a.m. ET.
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