NEW YORK: US non-farm payroll are estimated to have shed more than half a million jobs in January after losing a similar number in December as employers,fearing the impact of a weak economy on sales and profits, shrank their work forces to cut costs
A poll of 82 economists by Reuters produced a median estimate of 525,000 jobs lost in January after 524,000 jobs were shed from non-farm payrolls in December. Estimates of January job losses ranged from 400,000 to 780,000. Manufacturing payrolls were estimated to have lost 139,000 jobs, an unsurprising figure given gloomy readings on regional and nationwide manufacturing indexes. Average hourly earnings were estimated to have risen a slight 0.2 percent after rising just 0.3 percent in December. U.S. Labor Department data is due at 8:30 a.m. EST on Friday. A sampling of forecasts and analysis on the upcoming employment data follows: CARL RICCADONNA, SENIOR U.S. ECONOMIST, DEUTSCHE BANK SECURITIES: Forecast: Non-farm payrolls -400,0000 Unemployment rate 7.3 percent "Even though on the surface, 400,000 jobs lost in January will look like an improvement from even steeper losses in December, the concern is that the number is related to seasonal adjustment issues. The reason we have a smaller decline than consensus is that all of the layoffs that usually happen in the retail industry after the holiday season won't happen this year because temporary hiring for the holiday shopping season took place on a much reduced scale at the end of 2008.
So the layoffs of those temporary workers that usually occur in January and February will occur on a much smaller scale. The seasonal adjustments thus will probably make job losses look less severe than is the true underlying case. That means labor market weakness will be back with a vengeance, possibly as early as February, but certainly at the end of this quarter and in the second quarter. \
Fanning the flames of that concern is the fact that we had such a large inventory build-up in the fourth quarter which has to be worked down. That means production will be pulled back even more severely in the current quarter, leading to even more layoffs." DAVID RESLER, CHIEF ECONOMIST, NOMURA SECURITIES INTERNATIONAL, NEW YORK: Forecast: Non-farm payrolls -500,000 Unemployment rate 7.4 percent "We're looking for a drop in non-farm payroll jobs of 500,000 and for unemployment to be 7.4 percent. We judge that to be consistent with a variety of indicators showing weakening in the economy and job market. "There is some possibility that the decline will be less than our forecast because of vagaries in seasonal adjustments for retail workers. Stores hired fewer temporary workers than normal for the holiday shopping season so as a consequence fewer than normal workers were laid off in January. We've factored in a small influence for that. If we underestimated that adjustment, non-farm payrolls could show a smaller drop. "This is also a month where the change in employment from December to January is less meaningful. This is the time of the year for seasonal adjustment revisions. We expect them to be negative revisions, but how they'll affect individual months is anybody's guess. RDQ ECONOMICS: Forecast: Non-farm payrolls -400,000 jobs Unemployment rate 7.4 percent "The ADP employment report corroborates other data in suggesting that underlying labor market conditions remained very weak in January. We expect, however, that a technical issue related to seasonal adjustment factors in the retail sector may result in nonfarm payrolls falling by less than recent trends in January and we look for a 400,000 job decline in the month."
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