Next Friday, the US official employment report is due. Analysts at Wells Fargo expect a reading of 75K, modestly below market consensus of 90K.
Key Quotes:
“Payroll growth is slowing, but the GM strike will make things looks worse than they are. More than 40,000 UAW members were picketing the largest U.S. automaker during the survey week for the October employment report, but the effect may be even larger due to payroll adjustments at an array of firms up and down the auto supply chain. Determining the magnitude of the strike impact is a bit of a toss-up””the standard deviation of forecasts submitted to Bloomberg is around 35K””but the direction is clear. Leading indicators of labor demand point to slowing payroll growth, and we expect 75K.”
“Last month the ISM Manufacturing fell to the lowest level since June 2009, indicating that more firms in the U.S. factory sector were seeing declining activity than rising activity. Regional PMI surveys since then have been a little better, pointing to an improvement in the national survey. We expect it will stay in contraction territory (under 50) for the third straight month, but will improve to 49.3.”
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