What's expected:
- Consensus estimate +170K (range +80 to +225K)
- Private +130K
- November +199K
- Unemployment rate consensus estimate: 3.8% vs 3.7% prior
- Participation rate 62.8% prior
- Prior underemployment U6 prior 7.0%
- Avg hourly earnings y/y exp +3.9% y/y vs +4.0% prior
- Avg hourly earnings m/m exp +0.3% vs +0.4% prior
- Avg weekly hours exp 34.4 vs 34.4 prior
December so far:
- ADP report +164K vs +125K expected and +101K prior (this was a four-month high)
- ISM services employment not yet released
- ISM manufacturing employment 48.1 vs 45.8 prior
- Challenger job cuts 34.82k vs 45.51k prior
- Philly employment -1.7 vs +0.8 prior
- Empire employment -8.5 vs -4.5 prior
- Initial jobless claims survey week 206K vs 211K last month
The high estimate for non-farm payrolls is +225K from Ian Shepherdson at Pantheon, he's a great economist and usually doesn't step out of line without a good reason.
When I look at the broader market, the risks are certainly tilted more towards a strong report. Markets are betting heavily on rate cuts with March at 70% and 139 bps this year. A softer report would merely validate that while a reading at +225K or higher would push out the timeline. Of course, there are some moving pieces here as well with the unemployment rate and wage growth, particularly since there were some large divergences between the household and establishment surveys in 2023.
One thing the dollar bears might like is that the headline payrolls print is seasonally negative in December coming in below estimates 56% of the time and beating 44% of the time, according to BMO.
Best of luck.