HSBC are a little under consensus with their headline pick for the nonfarm payroll

  • There was a larger-than-usual drop in average temperatures across the country in early January, which may have dampened job creation for the month. Overall, we expect a 170,000 increase in nonfarm payrolls, as underlying momentum in the labour market still appears to be healthy.
  • The unemployment rate fell to a cycle low of 4.1% last October, down from 4.7% at the end of 2016. Over the past three months, unemployment has been steady at 4.1%. We think the unemployment rate could fall to a new low of 4.0% in January.
  • We expect that average hourly earnings rose just 0.1% m-o-m in January, with the softness partly reflecting pay period calendar quirks. We look for the y-o-y rate to stay at 2.5%, but there is some risk it could fall to 2.4% depending on rounding.


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