US: Weather effects to mask underlying strength of employment growth - Nomura

Analysts at Nomura expect the US employment growth to rebound somewhat in October after a weaker-than-expected gain in September and forecast a 175k increase in nonfarm payroll employment, 170k of which from private payrolls.

Key Quotes

“Looking beyond weather effects, incoming labor market data remains strong with low initial claims in states unaffected by inclement weather and healthy employment index readings on most business surveys. ADP’s employment report, typically less weathersensitive relative to the BLS’, reported a 227k increase in private payroll employment during October.”

“Moreover, the Conference Board’s labor market differential – the gap between those reporting “jobs plentiful” versus “hard to get” – improved further in October.”

“We do expect some slowing in manufacturing hiring but expect a still-healthy reading of +10k for October. At the moment, strength in domestic demand continues to offset any uncertainty regarding US trade policy, keeping manufacturing employment growth upbeat and labor market activity elevated overall.”