Goldman Sachs presents its forecast for the upcoming February jobs report, predicting a deceleration in payroll growth to 215k from January's exceptional figures. The forecast is grounded in the expectation of a normalization following January's one-off surge, attributed to seasonal adjustments and low layoff rates, with February's mild weather potentially adding 30-50k jobs. Additionally, Goldman Sachs anticipates average hourly earnings to be flat, attributing January's significant increase to severe winter weather effects. The firm expects the unemployment rate to hold steady at 3.7%.
Key Points:
- Payroll Growth Forecast: Anticipated slowdown to 215k in February, reflecting a return to more typical levels after January's unusual spike.
- Influence of Weather: February's job growth may benefit from mild weather conditions, slightly boosting figures.
- Average Hourly Earnings: Expected to be flat in February, potentially correcting for January's weather-influenced anomaly, with the year-on-year rate predicted to drop to 4.2%.
- Unemployment Rate Stability: Predicted to remain unchanged at 3.7%, indicating continued labor market strength.
Conclusion:
Goldman Sachs anticipates the February jobs report to reflect a moderated but still robust labor market, with payroll growth slowing from January's highs but remaining solid. The prediction of flat average hourly earnings suggests a temporary weather-related distortion in January's data, with a consequent decrease in the annual wage growth rate. The steady unemployment rate underscores the ongoing resilience of the US labor market.
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