What’s expected:

• Consensus estimate +65K (range +50K to +125K)

• September +29K

• August +133K

• July -10K

• Private consensus estimate +64K

• Unemployment rate consensus estimate: 4.2% vs 4.2% prior

• Participation rate 61.8% prior

• Prior underemployment U6 prior 7.6%

• Avg hourly earnings y/y exp +2.9% y/y vs +3.0% prior

• Avg hourly earnings m/m exp +0.3% vs +0.1% prior

• Avg weekly hours exp 34.4 vs 34.4 prior

October jobs so far:

• ADP employment report +86K vs +67K expected and +86K prior

• ISM services employment 51.4 vs 50.1 prior

• ISM manufacturing employment 52.4 vs 52.0 exp and 52.7 prior

• Challenger Job Cuts 43,994 vs 43,281 prior

• Philly employment +9.1 vs +11.8 prior

• Empire employment +10.3 vs +10.6 prior

• Initial jobless claims survey week 194K vs 196K last month

• Revelio Labs +26K vs +68K prior

There is a positive skew in the numbers releaed so far, including ADP and both ISM reports. Yesterday’s report from Revelio Labs got some attention as a weak point.

The market pricing for a December rate hike is down to 73% in light of the equity market volatility and the big question remains: What will Trump do in the Iran war. That and the outlook for AI with Anthropic’s IPO upcoming are the key variables right now. S&P 500 futures are slightly higher but they were higher yesterday before the wheels fell off. 

The US dollar is doing better on safe haven flows and a strong jobs report would add to the dollar bid and also get the market worrying about a scenario where the Fed has to hike even as the AI trade legs lower. 

BMO notes that “41% of previous unemployment prints for October have been lower-than-expected, 22% have been higher-than-estimates, and 37% have matched the consensus,” while there is a modest negative skew versus expectations on the headline number.

This article was written by Adam Button at investinglive.com.