MNI US Payrolls Preview: Watching For Weakness [updated]

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Executive Summary

• Nonfarm payrolls are seen increasing a seasonally adjusted 160k in February in the Bloomberg survey after 143k in January.
• Primary dealer analysts see 155k whilst the Bloomberg whisper is just 121k after a weak ADP report.
• Specific factors at play this month should be on the smaller side, with potentially a boost from adverse weather but some offsetting role from striking workers.
• We don’t expect federal government layoffs and freezing hires to materially show in this report, but the seasonality of the data leaves it susceptible to broader pausing in hiring plans.
• The unemployment rate is seen holding at 4.0% after a surprise drop in January, in a close call with 4.1%.
• AHE growth is seen at 0.3% M/M but with sizeable analyst skew lower, after a strong 0.5% M/M in January.  Average weekly hours worked should also be watched closely after a particularly weak January.
• With growth concerns from US policy in greatest focus, we expect asymmetrical sensitivity to a soft report, at least initially. There is currently 11bp of cuts priced for May and 71bp for 2025.
• Fed Chair Powell follows in a speech on the economic outlook at 1230ET, in one of the last steers before the media blackout begins on Saturday ahead of the March 18-19 FOMC meeting.