by Calculated Risk on 2/02/2017 02:47:00 PM

A few excerpts from a note by Goldman Sachs economist Spencer Hill: January Payrolls Preview

We forecast that nonfarm payrolls rose 200k in January, following an increase of 156k in December, with reacceleration reflecting a combination of lower-than-usual year-end layoffs, favorable weather effects, and further improvement in labor market indicators.

We believe the U3 unemployment rate is likely to fall one-tenth to 4.6% – which would mark a return to the cycle low – in part driven by reduced year-end retail layoffs. We expect average hourly earnings to rise 0.3% month over month and 2.8% year over year, reflecting firming labor markets and state-level minimum wage hikes.

The report will also be accompanied by the annual benchmark revision to the establishment survey as well as the annual introduction of new population controls in the household survey.

CR note: the consensus is for a 175k jobs added in January, and for the unemployment rate to be unchanged at 4.7%.