US Non-farm payrolls preview - HSBC

In the view of analysts at HSBC, the nonfarm payrolls rose 300,000 in October, reversing a sharp drop seen in September.

Key Quotes:

“State-level figures show that payroll employment in Florida fell by 127,000. This largely reflected the effects of Hurricane Irma, as many people were unable to work because their workplaces were not open or because they had temporarily been evacuated from their regions. The majority of these workers will have returned to their jobs in October and should, therefore, add to an overall national increase in payrolls for the month.

State level figures for Texas suggest that there will be a similar, but much smaller, impact from persons returning to work following Hurricane Harvey.

We expect that nonfarm payrolls rose 300,000 in October.

This month's release may shed some light on whether the sharp 0.5% rise in average hourly earnings in September was partly distorted by the hurricanes.

The September report showed a sharp drop in food services employment which is likely to be reversed in October.

Since average wages in the food service industry are lower than the national average, the temporary decline in jobs in this industry may have indirectly boosted the overall average for hourly wages.

We expect that average hourly earnings were unchanged m-o-m in October. The y-o-y rate of increase could fall to 2.5%, down from 2.9% in September.

In addition, we forecast the unemployment rate rose to 4.3% in October from 4.2% in September.”