What Economists Are Saying Before the September U.S. Jobs Report

(Bloomberg) -- The U.S. labor market was at its most robust in decades until Hurricane Florence landed.

Now, ahead of the Labor Department’s September jobs report due at 8:30 a.m. Friday in Washington, the question on economists’ minds is just how much the storm affected payrolls, wages and hours worked. They all agree that any weather-related distortions will prove temporary, one reason the initial results -- should they be weak -- won’t be taken as the most accurate signal of the employment picture. Other recent data show strong demand for labor, suggesting that Federal Reserve Chairman Jerome Powell doesn’t have much reason to halt gradual rate hikes.

Here’s what some economists expect from the September jobs report, from low to high estimates on non-farm payrolls. The median projection in Bloomberg’s survey calls for payrolls to add 185,000 jobs while the jobless rate drops to 3.8 percent, matching the lowest since 1969. Average hourly earnings probably increased 2.8 percent from a year earlier, less than the 2.9 percent pace in August that was the most since the recession ended in 2009.

Goldman Sachs (175,000)

“We expect a strong September employment report overall, with a decline in the unemployment rate, firm average hourly earnings, and a pickup in the underlying pace of payroll growth despite a temporary drag from Hurricane Florence,” Chief Economist Jan Hatzius wrote in a note. Revisions showing August job growth was greater than previously estimated and a rebound in household employment are more likely than not, he said.

Morgan Stanley (178,000)

Ellen Zentner, chief U.S. economist, sees “modest but still strong” job growth. “Record low levels of initial jobless claims in recent weeks as well as continued gains in consumer confidence points to solid net employment gains,” she said.

Hurricane Florence should have a “very limited impact” on September payrolls. “To be excluded from payrolls in the September employment report, an employee would have to be out of work without pay for the full pay period that includes Sept. 12,” while Florence made landfall in North Carolina on Sept. 14.

Amherst Pierpont (190,000)

Chief Economist Stephen Stanley sees a slight moderation in payroll gains “due to modest negative impact” from Florence as it affected less populated regions than last year’s major hurricanes such as Harvey, which hit Houston, and Irma, which affected much of Florida.

He noted that this year’s 207,000 average monthly payroll gain outpaces last year’s 182,000 average and the 195,000 rate in 2016. “In an environment where firms are widely reporting an inability to find qualified candidates to fill positions, a pickup in net hiring is especially impressive and indicative of the acceleration in economic growth this year,” he said.

Wells Fargo (210,000)

“Hiring beat expectations in August, and looks set to repeat,” according to senior economist Sam Bullard, noting surging private-sector assessments of employment conditions. He said “historically low levels of initial jobless claims and jobs ‘hard to get’ support our call” for a decline in the unemployment rate to 3.8 percent.

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