Société Générale economist Brian Jones has the most optimistic forecast for the jobs report on Wall Street for the second month in a row, predicting 175,000 workers were added to nonfarm payrolls in October versus the consensus forecast of 120,000.
Jones doesn’t stop at a prediction for how many payrolls were created in October, though. He also predicts exactly how markets will move immediately following the release.
“The SG forecast is above consensus and a positive intraday impact for risky assets is expected if the SG forecast materialises,” writes Jones. “We expect [the S&P 500] to move up by 0.4% and the [10-year] USD swap rate to move up by 3 [basis points] in the first half hour after the release.”
Interestingly, these two figures are identical to the predictions Jones made in September.
Jones says there is a statistical relationship between the deviation of the actual nonfarm payroll print from the consensus forecast and the market’s reaction.
“The relationship between asset changes around the release and the spread NFP versus consensus is measured by a regression (OLS),” says Jones.
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