“We expect payrolls to rise by a solid 180k in September, albeit a touch softer than in August (201k),” argue TD Securities analysts.
Key quotes
“Manufacturing should make a comeback, offset by some deceleration in private services. ISM and regional surveys remain consistent with payrolls printing near 200k or above. However, September prints tend to disappoint expectations and then see subsequent upward revisions. Additionally, Hurricane Florence could also dampen the number, consistent with past episodes of bad weather “” and despite the strong showing for September ADP. Any weather impact should be much more modest than in 2017, in our view: evacuations did take place during the reference week but given the scale and duration of the storm, we expect many workers would be considered employed.”
“Wages, however, could see a hurricane impact. The hurricane should negatively impact hours worked, implying a boost to average hourly earnings. The timing of the reference week itself (with the 12th landing on a Wednesday)”
“USD should take its cue from the rates market. The recent melt-up in rates and long USD positioning highlights the asymmetry in reaction should wages fall short of expectations. USDJPY should be the key barometer for broader G10FX, and we would expect 115 to be formidable resistance.”
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