A preview of all the numbers that hint at the results of the December 2019 non-farm payrolls report
The US employment report is due at 8:30 am ET on Friday, January 9, 2020:
- Median NFP estimate 160K (153k private)
- November 266K
- Highest estimate 210k (Morgan Stanley)
- Lowest estimate 125k (JPMorgan)
- Average estimate 165.5K
- Standard deviation 19.8k
- Prior participation rate 63.2%
- Prior underemployment U6 prior 6.9%
- Avg hourly earnings y/y exp 3.1% y/y vs 3.1% prior
- Avg hourly earnings m/m exp +0.3% vs +0.2% prior
- Avg weekly hours exp 34.4 vs 34.4 prior
Here's the April jobs story so far
- ADP 202K vs 124K prior (160K expected)
- ISM non-manufacturing employment 55.2 vs 55.5 prior
- ISM manufacturing employment 45.1 vs 46.6 prior
- Initial jobless claims 4 wk avg 233.3K vs 224.0K prior
- Claims during reference week 224K
- November Consumer confidence jobs hard to get 13.1 vs 12.4 prior
- Conference Board help wanted online demand for hiring not yet released
- October (very dated) JOLTS 7009K vs 7024k prior
Anticipation for this month's report is low because the Fed is firmly on hold and the market is sanguine about US economic prospects in the near-term.
The risks are mainly on the wage inflation numbers and the potential for a pickup that could bring the Fed back into the fold sooner than expected. In the past six months, monthly wage inflation has averaged 0.3%, which is almost 4% on an annualized pace. Even with a bump this month, expect a y/y reading just above 3%. However next month a strong reading rolls off and the comps weaken from there through April so the conditions are in place for some jitters on wage growth.
As for the FX market, geopolitics and new-year flows are continuing to dominate but at some point the focus will shift back to fundamentals and how the economy is doing in light of a phase one trade truce. I expect it would take an 80K miss in either direction to get a +50 pip move in USD/JPY on the day.
Another interesting twist is data from Bank of America, which has 10% of deposit accounts in the US. They built a big data model that tracks payroll direct deposits and it sees +54K growth.
