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Feb 04 - 06:55 PM

Danske: What We Expect from the US January Jobs Report

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:

  1. 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.
  2. 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.
  3. 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

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