US OUTLOOK/OPINION
[The below is taken from the MNI Payrolls Preview - see the full report here]
- The initial response rate of 47% for the October esatblishment survey was disappointing even by recent deteriorating standards, at its lowest since 1991.
- The BLS at the time noted that it was depressed in areas both affected and unaffected by the hurricanes so it can't be easily written off. “A larger influence on the October collection rate for establishment data was the timing and length of the collection period. This period, which can range from 10 to 16 days, lasted 10 days in October and was completed several days before the end of the month.”
- Second response rates have been tracking much higher at above 90%, which would see a huge amount more information than with the first read for October. That leaves scope for large two-month revisions, with attention on whether October's surprisingly soft month was revised away or whether September's initially strong report was further trimmed.
- We believe there’s a net expectation of upward revisions in this week’s report. BNP Paribas for instance run through the sequence of revisions to Sep 2017 payrolls growth after Hurricanes Harvey and Irma: the initial estimate saw national payrolls growth decline -33k, before +18k after the first revision (the report we’ll be getting this week for the Oct 2024 estimate) and +38k in the second release. Note that it was eventually upgraded to a +92k increase shown in the current vintage of data but that’s after benchmark revisions which can take longer to show up.
257 words