Goldman: Payrolls To Step Up In October

Goldman Sachs looks for a +525k nonfarm payrolls reading in October, above +450k survey median, with a 4.7% unemp rate (in line). They point to "the first full month of hiring following the expiration of federal enhanced unemployment benefits, and coupled with improving public health and strong labor demand, we expect this report to mark a step-up in trend."

• Some of the recovery will be Delta related (dining activity seen picking up), while education payrolls should reverse the 180k decline in September.
• Though seasonal factors may weigh on the outturn (to fit the strong Oct 2020 data).
• The unemp rate drop reflects strong household employment gains and a rebound in the participation rate (benefits ending, childcare constraints abating, etc), while they see an AHE increase of 0.5% (vs 0.4% consensus), in part due to higher wages at Wal-Mart.