Expectations for tomorrow’s report on employment in the US

Tomorrow will be published a report on employment in the US. The record growth in employment is expected in the non-agricultural sector of the US – 310K. This is a very significant indicator, which will be difficult to achieve. But, given the previous report on the US employment that disappointed the market, the number of jobs decreased by 33K. This was caused by natural disasters, which led to a significant reduction in jobs.

But, based on the recovery from storms, the possibility of such a large number of jobs looks very likely, although it may remain slightly inflated. The second questionable factor is the average hourly wage, which is expected to drop significantly after a record growth.

Taking into account the growth of wages in 0.2% after 0.5%, the possibility of creating new jobs in the amount of 310K, against the backdrop of recovery after a cataclysm, is very likely. But, even if the US economy succeeds in creating such a number of jobs, their quality remains very low. And this will absorb the positive effect of quantity.

As a result, the justification for job growth forecasts will be perceived positively by the market, but the duration of the positive effect of the news will directly depend on the growth of hourly wages.

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Hanzenko Anton