Labor market analysts would be wise not to overreact to the slowdown in the pace of hiring in the final month of 2017. The tepid December payroll gain came on the heels of a very solid November outcome, thereby leaving the trend moving more or less sideways. In fact, solid job gains in the goods sector in recent months provide an encouraging signal.
The latest GDP data confirm that growth is accelerating, but an overall pickup in hiring has been slow to follow -- in part due to the fact that the growth acceleration has proven to be milder than anticipated.
The consensus among economists polled by Bloomberg anticipates an increase in January nonfarm payrolls of 180k (181k private) following a gain of 148k in December.The seasonal hiring trend turns sharply negative in January due to post-holiday layoffs in the retail sector as well as seasonal shut-ins of outdoor activities, such as construction. The magnitude of the seasonal adjustment factor is consistently the largest for any month of the year, averaging minus 3 million over the past decade.
The expectations of the big investment banks and rating agencies are for the report to be above expectations. According Goldman, Moody's, Citi, BNP Paribas the number will be above 200k. On the other side are National bank of Canada, Oxford Economic, Westpac, HSBC which opinion is for the number will be below the expected data of 180k.
Source: Bloomberg Pro Terminal
Trader Bozhdiar Arabadzhiev
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