The BLS will release its report on nonfarm payrolls for October at 8:30 a.m. ET.
September’s report was strong. The economy added 248,000 jobs and the unemployment rate fell to 5.9% — the first time unemployment fell below 6% in six years. After a few weeks of low jobless claims reports, economists expect this month’s numbers to be nearly as strong.
Here are consensus expectations for Friday’s report:
- Nonfarm payrolls: +235,000
- Private payrolls: +225,000
- Unemployment rate: 5.9%
- Average hourly earnings, month-over-month: 0.2%
- Average hourly earnings, year-over-year: 2.1%
- Average weekly hours worked: 34.6
Last month, the labour force participation rate fell to 62.7% from 62.8%, and wages were flat month-over-month. Those two data points have lagged behind some of the headline indicators, and show a little more slack in the labour market than the unemployment rate and payrolls number would otherwise indicate.
But other data points suggest a robust economy. Current jobless claims are at the lowest level since 2000. The ADP private payrolls report jumped to 230,000 this month, up from 225,000 in in September. And the latest ISM services employment index jumped to a 9-year high of 59.6 in October..
What Wall Street Thinks
In a note to clients, Capital Economics writes, “It’s hard to ignore the fall in initial jobless claims further below 300,000 and the reasonably strong signals on hiring sent by the main activity surveys.”
Bank of America Merrill Lynch’s weekly economic note had some detail on particular sectors: “We think hiring in the manufacturing sector should pick up after two months of unexpected softness. We also look for a solid gain in retail jobs as retailers prepare for the holiday shopping season. We think the public sector will add 10,000 jobs, implying private payroll growth of 225,000.”
Credit Suisse thinks there will be a revision higher in the September numbers, which has been a trend in the last few months. In addition, “the last five initial September prints were revised up by 40K on average. Eight of the last 10 September prints have been revised higher.”
UBS thinks average hourly earnings will tick up. They write in a note, “small firms are increasingly reporting wage increases and difficulty finding qualified workers, which suggests eventually increasing wage pressure in average hourly earnings.”
The BLS jobs report will be released at 8:30 a.m. ET.