RSS Feed by Calculated Risk on 10/31/2024 02:55:00 PM
Thursday, October 31, 2024
October Employment Preview
On Friday at 8:30 AM ET, the BLS will release the employment report for October. The consensus is for 120,000 jobs added, and for the unemployment rate to be unchanged at 4.1%.
There were 254,000 jobs added in September, and the unemployment rate was at 4.1%.
From BofA:
• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires). The indexes will be released after the employment report.
• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 242,000 in October compared to 222,000 in September. This suggests more layoffs in October compared to September (likely due to hurricanes).
We expect nonfarm payrolls to rise by 100k in Oct after coming in at 254k in Sep. ... the u-rate should move back up to 4.2%, in part due to hurricane distortions.From Goldman Sachs:
emphasis added
We estimate nonfarm payrolls rose by 95k in October, below consensus of +105k and the three-month average of +186k. Alternative measures of employment growth were mixed, and strikes and the recent hurricanes likely weighed on payrolls growth this month. ... We estimate that the unemployment rate was unchanged at 4.1%, in line with consensus.• ADP Report: The ADP employment report showed 233,000 private sector jobs were added in October. This was well above consensus forecasts and suggests job gains above consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report (this also doesn't include the Boeing strike and probably misses some of the hurricane impact).
• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires). The indexes will be released after the employment report.
• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 242,000 in October compared to 222,000 in September. This suggests more layoffs in October compared to September (likely due to hurricanes).
• Strikes: The CES strike report shows 41,000 additional employees on strike during the reference period in October. This will reduce the headline jobs number.
• Hurricane Impact: Analysts are trying to estimate the distortion from Hurrican Milton. In September 2005, the initial BLS report showed a loss of 35 thousand jobs due to the impact of Hurricanes Katrina and Rita (Katrina hit in late August, and Rita during the reference period in September). This was eventually revised to a gain of 57 thousand (still well below the average for the year of 210 thousand per month. Milton also made landfall during the reference period, so the BLS will try to adjust for impact.
• Conclusion: Employment gains have average 167 thousand over the last 6 months. Subtracting 41 thousand for the strikes, and maybe 50 thousand for the hurricane impact would suggest employment gains will be below consensus expectations.
• Hurricane Impact: Analysts are trying to estimate the distortion from Hurrican Milton. In September 2005, the initial BLS report showed a loss of 35 thousand jobs due to the impact of Hurricanes Katrina and Rita (Katrina hit in late August, and Rita during the reference period in September). This was eventually revised to a gain of 57 thousand (still well below the average for the year of 210 thousand per month. Milton also made landfall during the reference period, so the BLS will try to adjust for impact.
• Conclusion: Employment gains have average 167 thousand over the last 6 months. Subtracting 41 thousand for the strikes, and maybe 50 thousand for the hurricane impact would suggest employment gains will be below consensus expectations.
