US jobs: Average hourly earnings to increase 0.3% m/m and 2.8% y/y – Barclays

The Barclays Research Team offers an in-depth preview of what to expect from today’s US non-farm payrolls report due later at 1230 GMT.

Key Quotes:

“We expect nonfarm payrolls to rise 200k, in line with the year-to-date average monthly increase.  

Factors influencing our forecast include initial and continuing jobless claims, which continue to point to low rates of job separation and other survey-based data on hiring.  

We look for government payrolls to rise 10k and private payrolls to increase 190k.  
Recent protectionist moves by the administration likely pose some downside risk to our forecast, but we do not see such effects present in the main inputs as of now.  

We will watch for signs that heightened policy uncertainty is weighing on business investment or hiring.  

Elsewhere in the report, we forecast another 0.1pp drop in the U3 unemployment rate, to 3.7%,  

And expect average hourly earnings to increase 0.3% m/m and 2.8% y/y.  

We look for average weekly hours to remain unchanged at 34.5.  

Altogether, a report in line with our forecast would be consistent with further normalization of the monetary policy stance, and we maintain our call for two additional 25bp rate hikes this year.”