NFP Preview: Forecasts from 10 major banks, strong print to reinforce Fed's recent hawkish pivot

The US Bureau of Labor Statistics (BLS) will release the November jobs report on Friday, December 3 at 13:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 10 major banks regarding the upcoming employment data. Following an increase of 531,000 in October, investors expect Nonfarm Payrolls to rise by 550,000 in November.

Westpac

“A gain of around 550K is expected, and there is again the possibility of further upward revisions. Gains around this level on an ongoing basis are more than enough to see maximum employment attained by end-2022, all the more so if participation holds well below its pre-pandemic level. This brings us to the policy outlook. The potential wage and inflation impact of a robust unemployment downtrend and constrained labour supply are likely to see the FOMC speed up the taper at their December meeting.” 

ING

“Nonfarm Payrolls are expected to post another sizeable increase of over 500K – we expect 550K – given that we know there is unsatiated demand out there for workers and we are hopeful that the supply of potential staff is increasing.”

TDS

“Along with our +650K forecast for payrolls, we forecast a 0.2pt decline in the unemployment rate and a 0.4% MoM (5.0% YoY) rise in hourly earnings.”

NBF

“Hiring should have continued at a strong pace in the month, as the epidemiological situation allowed the economic re-opening to continue. Layoffs, meanwhile, could have gone down a bit, judging from a decrease in initial jobless claims between the October and November reference periods. All told, payrolls may have increased 475K in the eleventh month of the year.” 

CIBC

“With job vacancies still close to record highs, the US labor market likely created 550K jobs in October. The unemployment rate likely fell by a tick, to 4.5%, leaving it a few ticks below the Fed’s projection for the end of the year, and only 0.7%-pts away from its end of 2022 projection. We likely are not far enough above the consensus to see a sustained market reaction.”

SocGen

“NFP are likely to add another half-million workers (515K) in November. We expect strong gains in many service sector categories, particularly in entertainment and travel. The unemployment rate can drop further. We expect a decline to 4.3% in November on the basis of strong job gains. The risk is that more people are returning to the workforce because they are spending their enhanced unemployment benefits. Such a phenomenon captures some workers but we do not see that as the key factor behind low labor participation rates.” 

Wells Fargo

“In terms of the November employment report, we look for a 600K gain, which is above consensus expectations.”

Citibank

“US November Nonfarm Payrolls – Citi: 450K, median: 500K, prior: 531K; Private Payrolls – Citi: 480K, median: 525K, prior: 604K; Average Hourly Earnings MoM – Citi: 0.4%, median: 0.4%, prior: 0.4%; Average Hourly Earnings YoY – Citi: 5.0%, median: 5.0%, prior: 4.9%; Unemployment Rate – Citi: 4.4%, median: 4.5%, prior: 4.6% – We expect a somewhat softer increase in jobs than the 531K gained in October but with substantial 2-sided risks. Average hourly earnings should rise with upside risks and the team also expects the unemployment rate to fall to 4.4% with labor force participation expected to return only slowly.”

Danske Bank

“We expect around 500K new jobs were created in line with the consensus estimate of 550K. More than that will increase the probability that the Fed will increase the tapering pace. Also worth keeping an eye on will be wage growth and whether people are returning to the jobs market, which will give new indications on what we can expect of inflation going forward.”

Deutsche Bank

“We are looking for NFP to grow by +600K, which would be the fastest pace of job growth since July, and that in turn would take the unemployment rate down to a post-pandemic low of 4.4%.”