The median estimate of 92 market economists polled by Bloomberg is that 180,000 workers were hired to nonfarm payrolls in January.
Brian Jones, senior U.S. economist at Société Génerale, claims the highest of those estimates — he predicts 270,000 jobs were created last month.
Below is his take:
We expect the BLS to report that nonfarm payrolls expanded by an above-consensus 270,000 in January, almost quadruple the preliminary 74,000 December gain and the strongest net hiring since the 332,000 jobs added in February 2013. Weather-related and fundamental factors support our expectation for a marked pickup in job creation last month. Figures collected by the National Oceanic and Atmospheric Administration (NOAA) revealed that at 32.9o degrees Fahrenheit, temperatures nationwide were 2.1o degrees warmer than usual over the month-to-date ended January 18 — a fairly dramatic improvement from the mean 27.8o degrees (5.6o degrees below normal) suffered over the first two weeks of December. Rather than guess at the number of persons who could not work because of inclement weather in January, we decided to explicitly incorporate the NOAA series in our modelling procedure.
Our statistical work revealed that the 7.7o degree positive swing in the month-to-survey-period temperature anomaly — the biggest witnessed over the past six years — could add roughly 60,000 jobs to the January report. Traditional labour market barometers also suggest that December’s surprisingly low print was a fluke. Implying a slower pace of pink-slipping, the average number of persons filing initial claims for unemployment insurance benefits fell by 10,000 to a three-month low of 334,000 between establishment canvasses. Although below the 69.4 reading posted in November, December’s three-month diffusion index of 67.7 was well above the 50-point breakeven mark and consistent with net hiring in the neighbourhood of 225,000. Supporting our view that the extent of hiring is poised to rebound in the BLS’ January report, the ISM surveys revealed the strongest hiring breadth since last August.
Over the past two years, Jones’s estimates have been, on average, 14,000 above the consensus estimate and 15,000 above the actual number, according to Bloomberg.
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