Goldman Sachs previews the September 2015 nonfarm payrolls report
Economists at Goldman Sachs are slightly above the +200K nonfarm payrolls consensus and are watching for a positive revision to the August report. They forecast +215K, which is virtually in line with the +212K average so far this year.
On the other key numbers they see the unemployment rate remaining at 5.1% with a downward bias (consensus is 5.1%) and average hourly earnings up 0.1% compared to +0.2% expected.
"The employment components of business surveys were softer on net this month, but ADP surprised on the upside, reported job availability improved slightly and the government employment gains should again make an above-trend contribution," economists wrote.
They note three things arguing for a stronger report:
- The Conference Board's 'jobs plentiful' vs 'jobs-hard-to-get' ratio rose to the best since Jan 2008
- ADP beating expectations
- Seasonal factors likely to boost government hiring numbers
They say jobless claims were a neutral indicator but see three reasons for a soft reading:
- Services sector surveys have been trending lower, although the ISM non-manufacturing report isn't released until after NFP this month.
- Manufacturing employment survey subcomponents have been "weaker on net", especially ISM.
- Online job ads data has "showed a decline in both new and total online job ads in September" which is continuing a soft trend
- Challenger job cuts rose modestly in September
Revisions
The most-critical skew they see is in the potential for a "substantial" upward revision to the August reading.
"Since 2003, the five industries with the clearest August deceleration of 40K relative to the prior three months and a subsequent revision of +35K," Goldman Sachs writes. "This year, these industries decelerated by a combined 56K, and the deceleration excluding government was 83K."
They decline to forecast the revision but based on that logic it could be something in the +45-70K range.
