US NFP to increase by 190k in December – Natixis

Thomas Julien, Research Analyst at Natixis, expects the pace of US job creations to slow down slightly in December compared to the past few months as the post hurricanes catch-up effect is fading.

Key Quotes

“Available leading indicators suggest that employment gains will remain dynamic:

Initial jobless claims moved lower during the reference period (even though they moved back up in the end of the month). Employment indicators from manufacturing surveys continued to point toward a firm pace of hiring during the month. In particular, the employment component of the ISM manufacturing survey moved slightly lower in December but remained well above the expansion threshold (50). Meanwhile, the labor market differential index (“Jobs plentiful – hard to get”) from the consumer confidence report (Conference Board) remained very close to its highest level in 16 years. 

• All in all, we expect NFP to increase by 190k in December (after +228k in November).” 

“Watch out

• Unemployment rate: As we anticipate the labor force participation rate to nudge slightly higher to 62.8% (from 62.7%), we forecast unemployment rate to remain unchanged at 4.1% for December.
• Wages: we expect the average hourly earnings to increase by +0.3% MoM in December, in line with the survey. On a yearly basis, wages should remain stable at 2.5%.”