NFP Preview: Forecasts From 3 Major Banks

The US Bureau of Labor Statistics (BLS) will release the February jobs report on Friday, March 4 at 13:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 3 major banks regarding the upcoming employment data.

Citibank

“Following a substantial upside surprise to job growth in January, We expect a similarly strong 510K increase in February. Average hourly earnings growth is expected to rise 0.5% MoM and 5.8% higher than a year ago with wage pressures seen generally strong in the coming months as firms still plan further wage increases. Markets will likely be most focused on this aspect of the February employment report, and upside risks will be particularly important for highlighting building inflationary pressures. And after rising modestly to 4.0% in January, we expect the US unemployment rate to decline to 3.8% in February, the lowest rate since the pandemic began and just 0.3pp above the 3.5% rate that prevailed in February 2020.”

Wells Fargo

“Our forecast of 450K new jobs in February is predicated on lower COVID-19 cases, robust labor demand and improving labor supply. We project that US employment will recover to its pre-pandemic level by year-end, giving the Fed plenty of cover to tighten monetary policy at a steady pace this year as the central bank gets above-target inflation.”

TDS

“We expect employment to have continued to recover in February following the unexpectedly strong January report – despite the Omicron-led surge in COVID-19 cases. That said, we look for some of last month’s boost to fizzle, though to a still firm job growth pace (TD: 300K, consensus: 400K). Seasonal adjustments were a factor in January and they will likely play a role again in February. In addition, despite firm job growth, we look for the unemployment rate to have remained steady at 4.0%, as labor force participation likely improved (consensus: 3.9%). We also expect wage growth to slow to a still strong 0.5% MoM from 0.7% in January, which would lift the YoY rate to an even stronger 5.8%.”