What to watch for in the NFP, due at 1330 GMT
This via Nomura (bolding mine):
We expect nonfarm payroll employment to increase strongly by 205k in January with 200k from the private sector and a 5k increase in government payrolls.
- While we do not view the current pace of goods-producing employment growth as sustainable, manufacturing employment likely contributed a solid 20k during the month based on regional manufacturing surveys.
- Moreover, some service-providing industries slowed unexpectedly in December, creating the potential for payback in January.
Relevant labor market indicators remained in healthy territory during the month, including a low, 220k reading for the establishment survey week's initial jobless claims (the week containing the 12th).
Consistent with our view of payroll growth, we expect the unemployment rate to decline 0.1pp to 4.0% in January as unemployed workers continue to find employment opportunities in a tight labor market.
Finally, partly supported by various states raising their minimum wages as well as a gradually tightening labor market, we expect average hourly earnings in January to increase by a healthy 0.3% m-o-m, corresponding to a 2.7% increase on a 12-month basis.
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Earlier:
- UBS on the main driver for markets, an inflection point & what to watch in the NFP
- 5 things to watch in the January nonfarm payroll report
- Goldman Sachs preview of Friday's US nonfarm payroll for January
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