Or employment day if you prefer.

The US will release the latest employment report (for October) at 8:30 AM ET/1230 GMT.

Here are the expectations:

  • Change in Non-farm payroll, 200K vs 134K last month
  • Unemployment rate 3.7% vs 3.7% last month
  • Underemployment rate was 7.5% last month. No estimate
  • Average hourly earnings MoM 0.2% vs 0.3% last month
  • Average hourly earnings YoY 3.1% vs 2.8% last
  • Participation rate 62.7% vs 62.7%
  • Change in Manufacturing payrolls 16K vs 18K last.

Some hints from other employment data:

  • ADP employment came in stronger than expected at 227K vs 187K expected. The ADP and the NFP can diverge. For example, last month the ADP came in at 217K while the NFP was lower at 134K. In August, the NFP was up at 270K while the ADP was much lower at 161.7K
  • The ISM manufacturing employment index came in at 56.8 vs 58.8 in September. Although lower, the index remains way above the 50 level. In fact, the manufacturing employment index has been above 50 since October 2017.
  • The ISM Non-manufacturing employment index shot up to 62.4 last in September. The October report has yet to be released. Last months level was the highest on record (going back to 1997 at least).
  • The weekly initial jobless claims remains near historic low levels. The 4- week average is currently at 213.8K. The low reached 206K. Although a little higher, 8K at historic low levels is not a big deal.

So on the surface, given the employment data seen in other reports, the estimate seems to confirm yet another solid report tomorrow for non-farm payroll.

Remember also, that with the unemployment rate down at 3.7%, it is harder to add jobs. That means even if the number comes out weaker than the expected 200K (say 170K), it may be less, but it is still solid. If on the other hand, the number comes out stronger than 200K, it will be really impressive.

In addition, although the MoM hourly wages are expected to moderate to 0.2% MoM (vs 0.3% previously), the YoY number is expected to rise to 3.1% .

How come?

Last October, the month on month number showed wages fell -0.2%. If that number is replaced with a gain of 0.2%, that accounts for a solid move up in the YoY (in fact it may edge up to 3.2%). A number like 3.1%-3.2% will be the highest level since 2009. That's a long time ago and will be a headline that may make the downward drift in the USD this week, difficultin.

The numbers suggest another solid report is in the cards given what we know.