US Jobs January nonfarm payrolls even more difficult to predict

One of this week’s important macro events is the release of US nonfarm payrolls (NFP) report on Friday. The jobs market continues to remain exceptionally strong in the US, and we don’t expect that to change for at least a few more months. However, apart from the ADP private sector payrolls report (Wednesday), there aren’t plenty of other pre-NFP leading indicators to look forward to. Both the ISM manufacturing (Friday) and services (next Tuesday) PMIs will be released after the NFP. So, we won’t have the leading employment components of these two important sectors to take into account, which makes the NFP very difficult to predict on this occasion – was it ever easy? Anyway, the consensus forecast is for a headline print of 165,000 increase in non-farm jobs, which, if correct, would be nearly half the increase of 312,000 we saw last month. In terms of wages, average hourly earnings are expected to have risen by 0.3% month-over-month in January. If the actual numbers – especially wages data – deviate from these expectations in a meaningful way, then expect a sharp move in the dollar.

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