9.2 C
New York
Thursday, March 28, 2024

Anticipating the Employment Report for October

Courtesy of Doug Short.

With the election behind us, the economic mover and shaker this week is the Friday employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, probably the most publicized in the near term being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository).

Today we have the October estimate of 230K new nonfarm private employment jobs from ADP, which we can consider along with the estimate of 314K total new jobs from TrimTabs.

The ADP 230K estimate came in above the Investing.com forecast of 220K for the ADP number.

The Investing.com forecast for the forthcoming BLS report is 231K nonfarm new jobs (the actual PAYEMS number). The Briefing.com PAYEMS consensus is 235K new jobs, but their own estimate is for a higher 275K.

Here is an excerpt from today’s ADP report:

“Employment continues to trend upward as we begin the last quarter of 2014, driven mostly by small to mid-sized companies,” said Carlos Rodriguez, president and chief executive officer of ADP. “October’s job growth is the highest since June and the second highest gain of 2014.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is steadily picking up pace. Job growth is strong and broad-based across industries and company sizes. At this pace of job growth unemployment and underemployment is quickly declining. The job market will soon be tight enough to support a meaningful acceleration in wage growth.”

Here is the press release from TrimTabs:

TrimTabs Investment Research estimates that the U.S. economy added 314,000 jobs in October, up from 206,000 in September.

“Despite the turmoil in financial markets, employment growth last month was the highest since May 2010, when census-related hiring skewed the data,” said David Santschi, Chief Executive Officer of TrimTabs Investment Research. “The economy has created an average of 215,000 jobs per month this year, nearly double the 114,000 per month in the same period last year.”

TrimTabs’ employment estimates are based on analysis of daily income tax deposits to the U.S. Treasury from the paychecks of the 140 million U.S. workers subject to withholding.

In a research note, TrimTabs explained that its estimate of job growth is consistent with a range of other indicators. The TrimTabs Macroeconomic Index is just below a record high, the employment indices of the Institute for Supply Management’s Manufacturing and Non-Manufacturing Surveys are firmly in expansion territory, and unemployment claims data has been very positive.

“Stronger employment growth and a falling unemployment rate suggest the Fed will start raising rates next year,” said Santschi. “The key question is how much the Fed will be able to lift rates when total credit as a percentage of GDP is as high as it was when the financial crisis started.”

Here is a visualization of the three series over the previous twelve months along with the latest ADP and TrimTabs estimates.

The key difference among the three is ADP tracks private employment, TrimTabs tracks all salaried US employees, and the BLS series is for Nonfarm Payrolls.

For a sense of the critical importance of nonfarm employment for the economy, see my Big Four Economic Indicators, which I will be updating shortly after the employment report is published.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,452FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x