US nonfarm payrolls likely increased by 170k - Nomura

Research Team at Nomura, suggests that the US employment indicators have been mixed but tilted to the upside and initial jobless claims remain at low levels.

Key Quotes

“All things considered, we expect private payrolls to have expanded by 170k in October. We forecast that government payrolls have remained unchanged in October, implying that nonfarm payrolls increased by 170k.

With manufacturing activity still soft, we think payrolls in the sector declined by 5k. Consensus is aligned with our forecasts for nonfarm and manufacturing payrolls. On the household survey measures, given the steady job gains, we forecast that the unemployment rate has returned to 4.9% in October (consensus predicts the same), following an uptick to 5.0% in September.

Last, as the labor market continues to tighten, we think that wages likely picked up over the month. Plus, a favorable calendar quirk (fewer working days during the BLS survey reference period) should help boost the per hour wage. Taking these factors into account, we forecast that average hourly earnings have grown by 0.3% m-o-m (2.5% y-o-y) in October. Consensus is also at 0.3% m-o-m (2.6% y-o-y).”