Market Outlook - BNP PARIBAS - Investment Services India

Key Data Preview
Chart 17: US Payrolls BNP Paribas Forecast: Payrolls Flat to Start 2010
Source: Reuters EcoWin Pro
Jan (f) Dec Nov Oct
Payroll Jobs k 0 -85 4 -127
Unemployment Rate % 10.1 10.0 10.0 10.1
Key Point:
Payrolls are expected to be flat in January and the
unemployment rate should inch higher to 10.1%.
US: Labour Report (January)
Release Date: Friday 5 February
We look for a flat reading on non-farm payrolls in January
after an unexpected decline of 85k in December. The
private service sector should create 45k jobs, driven largely
by temporary hiring and the government will likely hire 10k
workers. While job losses should continue to slow in the
goods-producing sector, neither the manufacturing nor the
construction sectors are anywhere near job creation and
we expect these sectors will offset service sector gains.
The unemployment rate is expected to rise to 10.1% on
steady labour force participation and a household survey
job loss; job losses in the household survey have averaged
more than 200k more than non-farm payrolls in recent
months, likely owing to the fact that it captures small
businesses hurt most by ongoing credit constraints. A
couple of factors to be aware of in the January report:
January has by far the largest seasonal factor, averaging
just under 3 million in recent years; this raises the potential
for statistical noise. In addition, seasonal factors will be
revised back to 2005 and monthly detail will be included
from the annual benchmarking of payrolls through March
2009 that was initially estimated at a total downward
revision of 824k over 12 months. Finally, the Household
Survey will include a population benchmark that will affect
estimates of the labour force.
Market Economics 29 January 2010
Market Mover 22 64
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