January non-farm payrolls preview by the numbers: Constructive indicators abound

• Consensus estimate +170Ok
• Estimate vary +60Ok to +250Ok
• December was +256Ok
• Non-public consensus +141Ok versus +223Ok prior
• Unemployment fee consensus estimate four.1% versus four.1% prior
• Prior unrounded unemployment fee four.0855%
• Prior participation fee 62.5%
• Prior underemployment U6 7.5%
• Avg hourly earnings y/y exp +three.eight% versus +three.9% prior
• Avg hourly earnings m/m exp +zero.three% versus +zero.three% prior
• Avg weekly hours exp 34.three versus 34.three prior

Numbers launched to this point this month:

• ADP report +183Ok versus +176Ok prior
• ISM companies employment 52.three vs 51.three prior (16-month excessive)
• ISM manufacturing employment 50.three vs 45.four prior
• Challenger job cuts 49.79ok vs 38.79ok prior
• Philly employment +11.9 vs +four.eight prior
• Empire employment +1.2 vs -6.6 prior
• Preliminary jobless claims survey week 223Ok (a six-week excessive)

Seasonally, the headline print is evenly cut up in January between misses and beats however 58% of unemployment fee readings have been decrease than anticipated with 34% larger and simply eight% matching the consensus.

All of those numbers (besides claims and Challenger) level to a excessive likelihood of a better-than-expected quantity which (after all) means we could have an enormous miss. One different issue to remember have been the fires in California in January, which might quickly weigh.

Maybe extra essential that the headlines shall be destructive revisions to 2024 with most economists anticipating a drop of 650-700Ok from the cumulative 2024 readings. That is higher than the -818Ok signalled in August but it surely’s nonetheless a drag of round 50Ok monthly weighted to H1. We can even be watching the inhabitants figures as a result of that would results in a bump up within the unemployment fee.

This text was written by Adam Button at www.ubaidahsan.com.



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