Synopsis:

Danske anticipates nonfarm payrolls increasing by 160k in November, reflecting a recovery from October's temporary disruptions but remaining at the lower end of market expectations. Negative seasonality and a cooling labor supply could temper broader employment growth.

Key Points:

• November Nonfarm Payrolls Forecast:

  • Expected increase: +160k, rebounding from October's weak print.
  • The reversal of temporary factors, such as strikes and hurricanes, will contribute to the gains.

• Seasonality Headwinds:

  • Negative seasonal effects are likely to weigh on employment figures in both November and December.

• Labor Supply Factors:

  • An earlier immigration-driven positive labor supply shock appears to be fading.
  • This could signal slower average payroll growth heading into 2025, especially as Trump's policies may further restrict labor supply dynamics.

Conclusion:

Danske expects the jobs report to highlight a moderate recovery in November, driven by the resolution of temporary disruptions. However, structural and seasonal factors, along with potential policy headwinds, point to the risk of weaker employment trends in 2025.