Deutsche: Nov Nonfarms Held Back By Education Weakness

Deutsche sees a higher November nonfarm payrolls figure than consensus (+600k vs +545k Bloomberg median), but a much higher private jobs number (+650k vs +525k expected).

• The discrepancy is due to their expectation that state and local education jobs "may once again be impacted by the seasonal factor".
• Overall, they expect hiring gains to be led by leisure/hospitality, retail, and administrative/waste services, and "would also not be surprised to see couriers and messengers outperform given still-elevated online sales.
• They're in line for avg hourly earnings (+0.4% M/M) and average weekly hours (34.7), but see a bigger dip in the unemployment rate (-0.2pp to 4.4%, vs 4.5% expected).
• That's because they see just under 0.1pp increase in the participation rate, for which more broadly, "Covid remains the biggest driver ".
• They say "most important for Fed officials will be progress on prime age labor force participation (ages 25-54)", which is likely to remain short of pre-Covid highs "until the pandemic is under control to an extent that allows potential workers to predictably forecast caregiving needs".