US NFP: Data points to a strong report - BBH

Research Team at BBH, suggests that at the end of the week, the US reports September employment data and although non-farm payrolls are difficult to forecast, BBH notes that four pieces of data point to a strong report. 

Key Quotes

“Weekly jobless claims have fallen since August.  The BLS data found about 50k more people than average missed work in August due to the weather.  Most of these should be expected to have returned.  A job availability measure, embedded in a recent consumer confidence report, rose to its best level since 2008.  Reports indicate that the withholding tax (from paychecks) rose 6% in September.

Not only is there scope for an upside surprise to the median market guesstimate of 170k, but other details of the report are expected to be constructive, including average hours worked and hourly earnings.  Although pricing of the Fed funds futures strip continue discounts about a 50% (50.6%, according to Bloomberg) of a hike this year, we think the bar to a December hike is relatively low, and the jobs report will more than meet it.”