January non-farm payrolls preview by the numbers: Positive signs abound ...Middle East

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January non-farm payrolls preview by the numbers: Positive signs abound
Consensus estimate +170K Estimate range +60K to +250KDecember was +256K Private consensus +141K versus +223K priorUnemployment rate consensus estimate 4.1% versus 4.1% priorPrior unrounded unemployment rate 4.0855%Prior participation rate 62.5%Prior underemployment U6 7.5% Avg hourly earnings y/y exp +3.8% versus +3.9% priorAvg hourly earnings m/m exp +0.3% versus +0.3% priorAvg weekly hours exp 34.3 versus 34.3 prior

Numbers released so far this month:

ADP report +183K versus +176K priorISM services employment 52.3 vs 51.3 prior (16-month high)ISM manufacturing employment 50.3 vs 45.4 priorChallenger job cuts 49.79k vs 38.79k prior Philly employment +11.9 vs +4.8 priorEmpire employment +1.2 vs -6.6 prior Initial jobless claims survey week 223K (a six-week high)

Seasonally, the headline print is evenly split in January between misses and beats but 58% of unemployment rate readings have been lower than expected with 34% higher and just 8% matching the consensus.

    All of these numbers (except claims and Challenger) point to a high chance of a better-than-expected number which (of course) means we will have a big miss. One other factor to keep in mind were the fires in California in January, which could temporarily weigh.

    Perhaps more important that the headlines will be negative revisions to 2024 with most economists expecting a drop of 650-700K from the cumulative 2024 readings. That's better than the -818K signalled in August but it's still a drag of around 50K per month weighted to H1. We will also be watching the population figures because that could leads to a bump up in the unemployment rate.

    This article was written by Adam Button at www.forexlive.com.

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