February non-farm payrolls preview by the numbers: A wide range of estimates and opinions

• Consensus estimate +160K
• Estimate range +30K to +300K
• January was +143K
• Private consensus +142K versus +111K prior
• Unemployment rate consensus estimate 4.0% versus 4.0% prior
• Prior unrounded unemployment rate 4.0113%
• Prior participation rate 62.6%
• Prior underemployment U6 7.5%
• Avg hourly earnings y/y exp +4.1% versus +4.1% prior
• Avg hourly earnings m/m exp +0.3% versus +0.5% prior
• Avg weekly hours exp 34.2 versus 34.1 prior

Numbers released so far this month:

• ADP report +77K versus +186K prior
• ISM services employment 53.9 vs 52.3 prior
• ISM manufacturing employment 47.6 vs 50.3 prior
• Challenger job cuts 172.02k vs 49.79k prior
• Philly employment +5.3 vs +11.9 prior
• Empire employment -3.6 vs +1.2 prior
• Initial jobless claims survey week 219K vs 215K prior

There have been some strong but conflicting messages ahead of this report and you can see that in the wide consensus estimate. The other numbers on February employment also show strong variation with big misses on ADP and manufacturing along with a jump in layoffs but that’s counteracted by a good services employment number.

There is good news on the seasonals according to BMO:

The headline payrolls print
is seasonally strong in February, coming in above estimates 73% of the time and
missing 27% of the time, by 69k and 121k, respectively, on average. 42% of previous
unemployment reads in February have been lower-than-expected, 35% have been
higher-than-estimates, and 23% have matched the consensus

After the release — particularly if it’s weak — market participants will be looking to the breakdown in public/private jobs for indications on whether any layoffs were concentrated there or in the real economy. If it’s all government job losses then the initial market reaction could quickly reverse.

This article was written by Adam Button at www.forexlive.com.