The October jobs report is due out on Friday (13:30 CET) and will provide important input in the Fed's decision as to whether it hikes or not in December. Thus, we may change our current call for 'no Fed hike' this year after the release.
Labour market data in October was mixed. Claims figures continue to signal job growth well above 200,000 while the PMI employment index for October points to only modest growth just above 100,000. We estimate job growth was 170,000 in October (in line with consensus), slightly higher than the September growth of 156,000 jobs.
We estimate the unemployment rate was unchanged at 5.0% in October with the probability skewed towards a fall back to 4.9%.
The sideways move in the unemployment rate throughout 2016 suggests there is further slack left in the labour market than previously thought.
We estimate the unemployment rate was unchanged at 5.0% in October with the probability skewed towards a fall back to 4.9%.
There is a sharp division among FOMC members regarding their views on labour market developments.
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