Andrew Wilkinson, Chief Economic Strategist for Miller Tabak & Co., expects a stronger jobs number in tomorrow’s employment situation report. Wilkinson predicted, in a report released today, a rise is non-farm payrolls of 140,000, significantly higher than the expectation of 90,000 to 95,000, citing “continued resilience in the U.S. economy in the face of challenging times.”
The October employment situation report comes out at 7:30 am CDT on Friday.
Wilkinson’s optimism is based on strengthening employment readings in both the manufacturing and service sector ISM reports this week. He notes that the numbers were positive “despite both missing on the headline number.”
He blamed a sharp fall in the reading for inventories for skewing the numbers short of market estimates. “Inventories were drawn down at an alarming pace in the service sectorwith its sub-index declining from 51.5 to 45.5. Likewise manufacturersdrew down inventories with its index sliding to 46.7 from 52. It is important to recognize that as a component piece of the headline number, the drag caused by inventories had a sizable impact on the apparent health of the sector,” Wilkinson wrote.
He cautioned not to necessarily expect a concurrent drop in the unemployment rate to go along with rising payrolls in coming months as the total U.S. labor force began to rise in September.