“The U.S. Bureau of Labor Statistics releases the January jobs report today at 8:30 AM ET.
The median estimate of 92 market economists polled by Bloomberg is that 180,000 workers were hired to nonfarm payrolls in January after last month’s report revealed only 74,000 hires, well below everyone’s estimates.
Meanwhile, economists predict 185,000 workers were hired to private-sector payrolls, implying a net 5,000 reduction in government employee headcount.
The big question is whether the weather effects that appeared to drag down the December number will also weigh on the January report. The consensus view seems to be that this is not likely to be the case due to the fact that temperatures were actually relatively warm over the period in which the January survey was conducted.
“The market is priced for 180,000, which implies an average gain of 127,000 over the past two months,” says Eric Green, global head of rates, FX, and commodities research at TD Securities.
“We enter the number where risks appear asymmetric. 180,000 would suggest the December number was an anomaly, but the two month trend would still be almost 80,000 off the recent pattern. Given the recent uptick in yields and a world populated with more uncertainty and volatility, that is not a number likely to push yields higher or keep risk appetites on the mend. A weaker number, however, would reinforce the fear that another false start on this recovery has reemerged.”
In its monthly National Employment Report released on Wednesday, payroll-processing firm ADP estimated 175,000 workers were hired by private-sector firms in January. The ADP report, which foreshadows the official jobs report, significantly overestimated the official December jobs number. However, this may have been due to differences in survey methodology — the upshot being that ADP’s report does not capture weather effects.
Beyond the nonfarm payrolls number, market participants will be watching the unemployment rate closely. The median estimate of market economists is that it will remain unchanged from December at 6.7%, but around 40% of those surveyed see it falling either to 6.6% or 6.5% in January…..”
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