By Matt Phillips
Provided we don’t have yet another euro-centered debt freakout — a big if — there’s only one report that’s likely to matter to the markets tomorrow, the Labor Department’s monthly jobs report.
8:30 a.m. — The consensus expectation is for the addition of 144,000 jobs in November, with the unemployment rate staying steady at 9.6%.?Here’s some of what we’re reading in advance of the big print.
Joe LaVorgna, Deutsche Bank: For the big picture, it is private employment that matters most, and the solid employment readings from the various purchasing managers’ surveys, the mild decline in initial jobless claims and the firming in employee tax receipts tell us November job gains should be at least as much as what we witnessed in October, if not a bit more.
Paul Dales, Capital Economics: The 159,000 gain in private payroll employment in October provided hope that employment could start to grow by the 200,000 per month necessary to more than absorb the increase in the labour force. The last time private payroll employment rose by that much for a sustained period was between January 2005 and April 2006.
Julia Coronado, BNP Paribas: The combination of the ADP and Challenger reports could suggest an overall reading on nonfarm payrolls very much in line with the consensus forecast of 145k with more private hiring but also more government job losses. We are therefore not inclined to change our forecast for 145k on this news. On balance the message would be that the economy continues to hire at a pace that is roughly sufficient to stabilize the unemployment rate and keep consumer spending expanding at a moderate pace, although we are expecting the unemployment rate to tick up in November to 9.7% as discouraged workers begin to re-enter the labor force.
Marc Chandler, Brown Brothers Harriman: The trend is clear. In Oct the 3-month average stood at 139k, the highest since the March/April job surge (a total of almost 400k in those two months). There is some risk that the work week and hourly earnings, important elements of the report, may not show the same improvement as the job creation, but on balance a strong US jobs report is likely.
Nomura Global Economics: Available labor market data for the month have also looked encouraging. The employment components of both the Philly Fed and Empire State manufacturing surveys remained well-above their breakeven levels, and the four-week average of initial jobless claims moved to its lowest level this year. We therefore anticipate solid growth in nonfarm payroll employment of 130,000 and a decline in the unemployment rate of 9.5% (private payroll employment may be a bit higher given job cuts among state and local government workers). We think the bulk of job gains will come from service-providing sectors, including retail trade, transportation, professional and business services, and health and education.
Maury Harris, UBS: The employment report will probably show further strengthening in the labor market in November, with payrolls rising solidly (total UBS: 150k, cons: 145k; private UBS: 175k, cons: 155k) and the unemployment rate holding steady (UBS & cons: 9.6%). We also expect upward revisions to payrolls in September and October, reflecting improved underlying data as well as the seasonal adjustment methodology. We, along with consensus, project a 0.2% m/m rise in average hourly earnings and the workweek unchanged at 34.3 hours.
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