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NFP Preview - Job Growth Likely to Meet Consensus

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However, despite the dour investor sentiment the latest economic data confirms that US labor markets are clearly improving suggesting that tomorrow's NFP report is likely to beat market expectations of 150K jobs although it may come up short of the most bullish estimates of 200K jobs or more. Seven out of eight key metrics that we track in anticipation of the NFP number have printed better than forecast including today ADP report which registered a gain of 325K versus 175K eyed. The latest round of US economic data also showed improvement in Consumer confidence to 67.7 from 65.6 projected, ISM Manufacturing employment which printed at 55.1 versus 51.8 and decline in the four week moving average of jobless claims to 371k from 378K forecast.

Overall, US economic data clearly shows an expansionary labor market providing ample support for tomorrow's consensus call of 150K new jobs. However, perhaps the most important predictor of NFP results - the employment sub component of ISM Services which comprises 70% of the US economy - is showing much more modest gains in job growth. The employment sub component of ISM Non Manufacturing increased by only 0.5 points to 49.4 from 48.9 remaining below the key 50 boom/bust line. The relatively tepid growth in service sector jobs indicates that tomorrow's NFPs are unlikely to exceed the 200K barrier and will therefore suggest that the US economy continues to recover but at a distinctly moderate pace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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