Employment Report Preview

Morgan Stanley forecasts January nonfarm payrolls to grow by 55k with the unemployment rate steady at 4.4%. The report highlights a stabilizing labor market with temporary boosts in retail offset by federal government resignations.

Key Takeaways

• 1.Morgan Stanley forecasts January nonfarm payrolls to rise by 55k, driven by a 90k increase in private payrolls but offset by federal government declines.
• 2.The unemployment rate is expected to remain unchanged at 4.4%, with risks skewed toward a lower rate of 4.3%.
• 3.Retail payrolls are expected to see a seasonal rebound of +30k in January after weak holiday hiring in late 2025.

Table of Contents

• Payrolls Forecast
• A temporary seasonal boost to retail payrolls...
• ...offset in part by more government layoffs
• Risks in both directions
• The annual benchmark revision: Downward revisions would imply a lower breakeven pace
• Hours and earnings: Still consistent with 2% inflation given productivity
• Unemployment Rate and Labor Force Participation

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial