Friday preview: US non-farm payrolls report under the microscope

The US non-farm payrolls report on Friday will come under scrutiny as the market widely expects an interest rate hike by the Federal Reserve in December.

The Labor Department's report may show 175,000 jobs were added to the economy in October after 156,000 in September, according to the consensus forecast.

The unemployment rate is expected to fall to 4.9% in October from 5.0% the previous month.

Average hourly earnings are forecast to have risen 0.3% month-on-month in October, up from a 0.2% increase in September. On the year, average hourly earnings, are projected to remain at 2.6% growth.

The employment figures will be under the microscope as the Federal Reserve takes the jobs data into consideration in determining the timing of the next rate increase.

Barclays, which predicts non-farm payrolls will rise 175,000, said: “On balance, overall job growth of 175,000 would confirm ongoing strength in the labour market. The increase in payrolls, combined with the ongoing improvement in wages, should boost household income and keep consumption on track.

“We also believe at these numbers employment growth is sufficient to keep the Fed on track for a December rate hike. “

Barclays anticipates 165,000 of the job gains to come from the private sector, in particularly in the services industry.

On Wednesday, the private payrolls report from ADP showed employers added 147,000 jobs last month, missing expectations for a 165,000 increase. The September figure was revised up to show 202,000 jobs were added, compared to a previous estimate of 154,000.

Capital Economics said: "In isolation, the weaker than expected ADP figure suggests there is some downside risk to our forecast of a 190,000 increase in non-farm payroll employment, due out this Friday.

"But given the latest evidence of an improvement in the activity surveys, particularly the employment index in the ISM manufacturing index, we’re happy to stick with our existing estimate."

A separate report from the Labor Department on Thursday showed initial jobless claims last week were up 7,000 from the previous week’s unrevised level to 265,000. Economists had been expecting claims to be unchanged at 258,000.

This marked the 87th consecutive week of initial claims below 300,000 – the longest streak since 1970

Friday 04 November

INTERIM DIVIDEND PAYMENT DATE
Ascential, BBA Aviation, Bodycote, Cello Group, Cobham, CRH, Elecosoft, F&C Private Equity Trust, Fisher (James) & Sons, Hastings Group Holdings , Huntsworth, Johnson Service Group, Judges Scientific, M. P. Evans Group, OneSavings Bank, Rightmove, SIG, Synthomer, Unite Group, Weir Group, XLMedia

QUARTERLY PAYMENT DATE
Investors Capital Trust 'A' Shares

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (US) (12:30)
Producer Price Index (EU) (10:00)
Unemployment Rate (US) (12:30)

Q3
Kennedy Wilson Europe Real Estate

AGMS
Jupiter Energy Ltd

TRADING ANNOUNCEMENTS
Paddy Power Betfair

FINAL DIVIDEND PAYMENT DATE
Begbies Traynor Group, Eckoh