U.S. December non-farm payrolls likely to rise by 185K, average hourly earnings to rise by 0.3 pct m/m: Barclays Research

The United States’ nonfarm payrolls is expected to have risen by 185k during the month of December, according to the latest report from Barclays Research, underlying a combination of labor market data, which points to some slowing in trend employment growth, and a belief that weather-related effects held down employment in November.

The outlook for slower growth in activity in 2019 relative to last year on account of a smaller impulse from fiscal stimulus leads us to expect less employment growth this year. As a result, growth in nonfarm payrolls is seen to slow from their roughly 200k per month pace observed in 2018 to something closer to 160k per month in 2019.

Within the December employment forecast, government payrolls is expected to be flat on the month and look for a rebound in both service and goods sector employment to drive the increase. The gain in employment should be enough to push the unemployment rate modestly lower and expect it to drop from 3.7 percent in November (3.671 percent rounded to three decimals) to 3.6 percent in December.

"We expect the rebound in the services employment to be concentrated in business services and leisure and hospitality, while we expect a modest rebound in construction employment to boost overall goods employment. Elsewhere, we look for average hourly earnings to rise by 0.3 percent m/m and 3.0 percent y/y, and for average weekly hours to hold steady at 34.4," Barclays Research commented.