An early stab at non-farm payrolls
[Mish note: this number is likely to have a HUGE impact on the markets - due out next Friday]
The week ahead will be dominated with thoughts of the US non-farm payrolls release. And given the importance of this data for future Fed decisions, it is probably worth having an early stab at what is in store for these numbers.
The starting point, as ever, is the initial claims data, which together with the continued claims figures, suggest an underlying payrolls change of about +80-90K. Very low mass-layoffs in February suggest we should nudge up this base figure by some 20K or so, and maybe a bit more because
of the help-wanted improvement. The Philly Fed and Empire State employment indices do not suggest much need for further amendment, though we might want to revisit this assumption following the ISM surveys next week.
Another factor to consider is the 72,000 fall in striking workers in March, which on its own could deliver a hefty boost to payrolls. We arrive at our 185K final estimate for payrolls by also allowing for some statistical payback, as we judge that the February payrolls result was substantially below trend as indicated by the partial data.
This is only a preliminary estimate, and we will be revisiting our calculations over the coming week. As well as the ISM employment indices, we might also get some updated mass-layoff numbers.
The Fed has suggested that it would need to see a couple of
consecutive 150K payrolls numbers before they could consider raising rates. But even if we only got a 140K figure next Friday, that would probably be enough to "count", and could lead to a reassessment of the timing of the Fed's first rate hike.
Rob Carnell
Senior International Economist
Commonwealth Bank Australia |
