Goldman’s Chief Economist Jan Hatzius was on CNBC yesterday outlining his outlook for this Friday’s non-farm payrolls report (see video below). He is calling for 125K jobs in this month’s report. The consensus is currently calling for 110K. Goldman isn’t the only big bank calling for an upside surprise this Friday. JP Morgan says we should see 120K new jobs:
“We forecast that nonfarm payrolls increased 120,000 inJune, with 140,000 jobs added in the private sector.This would be an improvement relative to the report forMay in which payrolls increased by a meager 54,000and the unemployment rate ticked up to 9.1%, but itwould still be noticeably weaker than what was reported for February, March, and April. The persistentlyelevated jobless claims readings point to continued softness in the labor market, and the other recent economicindicators have generally come in on the soft side.”
Wells Fargo bucks the big bank trend with the other side of the coin and a below consensus reading of just 88K:
“Nonfarm employment sorely disappointed in May with only 54,000 jobs added following an average of 220,000 job gains in the previous three months. While nonfarm payrolls registered a lessthan-expected increase, much of the pullback was likely due to technical factors such as weather and the Japanese earthquake. We expect that while most of these temporary factors have run their course, we could see another below-trend reading in June. Initial jobless claims have been above 400,000, which is the level consistent with modest job gains, for the past three months and regional manufacturing surveys also showed a pullback in the employment component for June. The unemployment rate should remain unchanged at 9.1 percent in June. While some of the labor market weakness is due to cyclical factors, structural factors continue to play a large role.”
No matter where it comes in the number is likely to continue reflecting an economy that is operating well below its full potential.
The full Hatzius interview is attached: