NFP preview highlights - Westpac

Highlights from Westpac note detailing their NFP expectations. Westpac is one of the low-ball expectations at 170k; TD Securities looking for 175k and Goldman Sachs calling for 205k.

Key points:

• Month to month volatility in nonfarm payrolls remains significant. In the December quarter, gains of 211k and 252k in October and November were followed by a 148k rise in December. The average for the quarter was 204k, a step up from the average of the past six months and 2017 overall.
• We believe this acceleration at end-2017 is noise rather than signal, particularly given the economy is at full employment and the pace of employment growth in 2017 was well ahead of population growth.
• As a consequence, we look for a (still strong) 170k outcome in January. Looking ahead, 2018 is likely to see a further deceleration in employment growth to circa 155k per month, down from around 190k in 2016 and 170k in 2017.