US
- The nature of the “deferred resignation program” discussed in part one, with some 77k federal employees accepting the offer, shouldn’t see any direct impact on payrolls growth (in the establishment survey) until the October report as workers will remain on the payroll in the interim.
- The same is true for weekly jobless claims data, but in both cases expect them to be watched for signs that federal-reliant contractors are reducing headcount.
- To this end, watch today’s weekly jobless claims data, even if it’s possibly too soon for any of these indirect impacts to show initial claims up to Feb 15 for just over a week since the offer expired and continuing claims up to Feb 8. Continuing claims can still be of note though if they start to imply a cooling in rehiring expectations.
- We specifically focus on claims in Maryland, Virginia and Washington DC, which have drifted fractionally higher recently but are nothing untoward.
- One area where the direct impact from the federal buy-out scheme could show however is the household survey within the February payrolls report. Assuming those who accepted the offer are treated as equivalent to a furloughed worker, they’ll register as unemployed. A word of caution though, it’s a much more volatile survey, with a 90% confidence level of +-600k for employment vs +-136k for payrolls.
- Rounding out the major labor releases, we’re unsure when the buy-out scheme will show up in quit rates within the JOLTS report. As shown in part one though, the federal sector quits rate was just 0.4% in December – its lowest since mid-2017 – compared to private sector quits of 2.2%.
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