Jobs day in America is upon us once again.
On Friday morning, we’ll find out how many new jobs the US economy created in September.
And Wall Street’s forecast is the most downbeat its been since March 2014.
Via Bloomberg, here’s what Wall Street is expecting:
- Nonfarm payrolls: +200,000
- Unemployment rate: 5.1%
- Average hourly earnings, month-over-month: +0.2%
- Average hourly earnings, year-over-year: +2.4%
- Average weekly hours worked: 34.6
In August, the unemployment rate plunged to a new seven-year low of 5.1% while the labour force participation rate also fell. In August, the economy added 173,000 jobs, fewer than forecast, but economists estimate that job growth will be revised higher on Friday (as have most August prints in the last 15 years).
And most of the reason for the downbeat look for September is manufacturing.
“Much of the slowdown in hiring has been in the mining and manufacturing sectors,” notes HSBC’s James Pomeroy to clients.
And according to TD Securities, the sector is in an outright recession in the US. The weakness in manufacturing, however, is not just confined to the US but global, and according to Morgan Stanley’s Ted Wieseman, uncertainty about the global economy and a stronger dollar could slow new hiring.
The bright spot in expectations is a forecast breakout in wage growth during September. Wall Street expects year-over-year hourly earnings growth of 2.4%, which would be a high for this economic cycle, according to Citi’s Steve Englander.
Englander notes that pressures for higher wages from across America’s labour market mean that workers are growing more reluctant to be employed at prevailing rates.
And so after years of sideways wage growth, a breakout in wages could be the big news out of Friday’s report.