What can we expect from Non-farm payrolls today at 15:30

The December jobs report will provide important clues as to whether a moderate acceleration in economic growth will translate into a faster pace of hiring, or an already-tight labor market will instead trigger a rebound in productivity growth. The pace of job creation is solid, with the 12-month moving average around 170k, but this reflects a steady deceleration from early 2015, when it peaked near 260k.

Bloomberg Economics projects a mild acceleration in the pace of hiring in the first half of 2018 as wage pressures remain muted and the labor market reveals greater spare capacity than the unemployment rate suggests. However, as the jobless rate dips below 4% later this year, mounting labor-cost pressures will motivate businesses to adopt productivity-enhancing measures. Rebounding productivity growth will encourage at least some hawkish-leaning Fed officials to tolerate a slower pace of policy normalization than they might otherwise prefer.

The consensus among economists polled by Bloomberg calls for an increase in December nonfarm payrolls of 190k (190k private) following a gain of 228k in November. The projected increase is moderately above the underlying trend -- the three-, six- and 12-month moving averages have recently converged within a tight range of 170k–178k. Bloomberg Economics projects an above-consensus increase of 205k.

Bloomberg Economics projects faster GDP growth in 2018 (2.6%) relative to the average of the prior years of the current cycle. All else being equal, this should translate into a re-acceleration in the pace of hiring -- at least until workers are more successful in extracting larger paychecks from their employers.

The consensus forecast for the unemployment rate anticipates no change from the 4.1% level reported in October-November. Bloomberg Economics expects a similar outcome in December, but expects the rate to reach 3.8% by year-end.

Inflation is the main engine of US economy. The analysis shows that FED's target of 2% will be accomplished in the 4th quarter of 2018. Inflation increase means higher interest rates, stronger currency and better solvency of the US citizens.

The opinions of the analysis are differ about NFP number. CTI capital, Moody's Analytics, Oxford Economics thinks that NFP will be above 200k, On the other side, Goldman Sachs, BNP Paribas, National Bank of Canada believes that NFP will be around 175k.

Source: Bloomberg Pro Terminal

Trader Bozhidar Arabadzhiev

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