US: Oct NFP Preview - Nomura

Research Analysts at Nomura present a comprehensive preview of the US labour market report for October, noting that a better print should keep the FOMC on track for a rate hike in Dec.

Key Quotes:

“We forecast that the Bureau of Labor Statistics will report on Friday that nonfarm payrolls increased by 170k in October. We expect no change in payrolls in the public sector, implying that private payrolls increased by 170k.”

“If our forecasts prove true, it would imply job gains remain steady and should continue to put downward pressure on the unemployment rate (we expect the unemployment rate to decline to 4.9% from 5.0%).”

“Elsewhere, we expect average hourly earnings to grow by 0.30% m-o-m (2.5% y-o-y) in October. We think that the month-over-month change rate will be biased upwards due to fewer working days during the BLS survey period (only 10 weekdays).”

“If our forecasts are realized, it should keep the FOMC on track to raise rates this year. Although the minutes from the September meeting showed there’s clear disagreement whether or not the economy is at “full employment”, participants generally agreed that labor market conditions had improved over the year and continue to make progress.”