By eFXdata — Feb 04 - 04:00 PM
Synopsis:
Danske expects a slowdown in nonfarm payrolls (NFP) to +150k (from +254k), citing seasonal labor adjustments and potential benchmark revisions as key factors.
Key Points:
-
Seasonal Adjustments Could Weigh on Payrolls:
- January typically sees strong positive seasonal adjustments to compensate for holiday worker layoffs.
- In 2022-23, lower seasonal hiring led to an upside surprise in payrolls (+483k).
- This year, more normal seasonal hiring patterns could mean less of an upside surprise and softer job gains.
-
Unemployment Rate to Hold Steady at 4.1%:
- Labor supply growth is expected to slow down, partially due to:
- Temporary workers leaving the labor force after the holiday season.
- The fading impact of immigration-driven labor market growth seen last year.
- Labor supply growth is expected to slow down, partially due to:
-
Key Focus on Benchmark Revisions:
- Annual revisions could confirm the deeply negative early estimate of -818k jobs, which would reshape market views on labor strength.
Conclusion:
Danske sees January payrolls slowing to 150k, with seasonal adjustments as the main drag. The unemployment rate should remain stable, but benchmark revisions could be a major wildcard impacting broader labor market assessments.
Source:
Danske Research/Market Commentary