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

While the monthly jobs report is routinely among the most important high-frequency data releases, the February reading will be particularly significant given the acute market focus on whether the Federal Reserve is at risk of falling behind the curve in terms of policy normalization.

A bout of elevated financial-market volatility transpired last month after the January jobs report showed a potential signal of stiffening wage pressures. In light of this, market participants will be focused on the unemployment rate and the pace of gains in average hourly earnings.

Bloomberg Economics dismissed the January spike in average hourly earnings because it was narrowly concentrated and likely driven by a curtailment of hours worked due to severe winter weather at the beginning of the month. The length of the workweek likely normalized in February, and average hourly earnings should have moderated, as a result. We project an above-consensus payroll gain and a new cyclical low in the unemployment rate.

The consensus among economists polled by Bloomberg anticipates an increase in February nonfarm payrolls of 205k (205k private) following a gain of 200k in January. The projected rise is moderately above the underlying trend, as the six- and 12-month moving averages both stood near 180k in January. Bloomberg Economics is maintaining its initial projection for an above-consensus gain of 225k.

Average Hourly Earnings: We expect a 0.1% increase in average hourly earnings, below consensus’ 0.2% forecast.

At the chart below we showed what are the expectations of Bloomberg analysts for GDP, Unemployment rate, CPI, Core CPI and interest rate level until the end of 2019.

The positive sentiment for NFP prevails.

Goldman Sachs, Moody's, Citi, BNP Paribas, Westpac are betting on the higher than expected data. On the other side are HSBC, Oxford Economics and Bantleon Bank, which thinks tha the data will be below expectations.

Source: Bloomberg Pro Terminal

Trader Bozhidar Arabadzhiev

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