The Barclays Research Team offer a sneak peek at what to expect from today”s US labor market report due at 1330 GMT, with the central focus likely to be on the wage growth.
“Nonfarm payrolls to have increased 160k in January … following some payback from December strength.
We also assume some negative spillovers from the government shutdown on private sector contractors. As per the Bureau of Labor Statistics (BLS), all federal employees affected by the shutdown, including those furloughed, will be counted as 'employed', as a legislation promising back-pay for the reference period as already been passed.
Consequently, we do not expect a decline in federal payrolls, and look for all the change to show up in private sector payrolls.
In the Household Survey, however, furloughed workers will be categorized as 'unemployed on temporary layoff', and therefore, we expect the unemployment rate to rise by a tenth, to 4.0%.
We look for average hourly earnings to rise 0.3% m/m (3.2% y/y).
Expect average weekly hours to remain unchanged at 34.5.”