US NFP Preview: 7 major banks expectations from the September release

We are closing in on the September’s release of US Non-Farm Payrolls data. The following are the expectations as forecasted by the economists and researchers of 7 major banks.

After the employment growth slowed in August after two months of very strong jobs growth, all the 7 major banks suggests that September NFP is likely to print a number in between 130K to 203K while the unemployment rate is expected to remain unchanged at 4.9%.

Nomura

Our private payrolls tracking model indicates businesses gained 214k workers in September, which would suggest a reacceleration in job growth. But we think that our model may be giving a too optimistic read on job growth as it relies heavily on the claims data, which do not necessarily imply more job creation, just fewer involuntary separations. Taking all these factors into account, we think nonfarm payrolls grew by 160k (Consensus: 174k) with 155k of those workers being added to the private sector (Consensus: 170k). Given the weak employment data from regional manufacturing surveys, we think manufacturing payrolls declined by 5k (Consensus: -4k). We also think the steady job gains should be enough to absorb any incoming labor supply, but not enough to exert meaningful pressure on the unemployment rate. Therefore, we forecast an unchanged unemployment rate at 4.9% in September (Consensus: 4.9%). Elsewhere, we forecast average hourly earnings grew by 0.2% m-o-m (Consensus: +0.3% m-o-m).

Deutsche Bank

Our US economists are at the lower end of the market range today with a 130k forecast. As always it’s also worth keeping an eye on the other important components of the employment report including the unemployment rate (expected to hold steady at 4.9%), average hourly earnings (+0.3% mom expected) and average weekly hours (expected to nudge up to 34.4hrs from 34.3hrs).

MUFG

Our NFP model is estimating a gain of 203k. This is in part due to the huge jump in the employment component in the ISM non-manufacturing report and certainly suggests upside risks today relative to the consensus estimate of a 172k gain. Crucial also will be the data on average earnings. The annual growth rate in hourly earnings is expected to jump with only a small 0.1% m/m gain recorded in September of last year.

RBC CM

The data we have in-hand suggest US nonfarm payrolls should come in near trend at 170k for both the headline and private reads. Jobless claims continue to plumb the depths and suggest no stress in the labor market at present. Meanwhile, job openings remain at the highs of the cycle and point to robust demand for headcount. Accordingly, we expect payroll growth to remain well above potential in the near-term.

TDS

Nonfarm payrolls for September will serve as the highlight and represent the final jobs report before the November FOMC. Calendar effects may restrain job growth, though TD still expects a well-above breakeven 160k print while the unemployment rate should hold at 4.9%. Furthermore, the timing of the reference week indicates strong average hourly earnings, where we look for 0.3% m/m with the risks tilted to the upside. The market is comparably more hawkish on job growth at 172k but otherwise in line with our predictions.

BBH

At the end of the week, the US reports September employment data.  Not only is there scope for an upside surprise to the median market guesstimate of 170k, but other details of the report are expected to be constructive, including average hours worked and hourly earnings.  Although pricing of the Fed funds futures strip continue discounts about a 50% (50.6%, according to Bloomberg) of a hike this year, we think the bar to a December hike is relatively low, and the jobs report will more than meet it.  

Danske Bank

Employment growth slowed in August as expected after two months of very strong jobs growth. This leaves average jobs growth over the summer at a solid 230,000 per month. However, one has to take into account that this strong growth came after a very weak spring. In September, signals on employment growth were mixed. The report will provide important input for the Fed when deciding whether to hike this year - we think it will stay put.

Click here to read more about the NFP preview from our Chief Analyst Valeria Bednarik titled “Nonfarm Payrolls Preview: US economy getting closer to full employment”