In our 27th Sep NFP preview, we had predicted NFP for Sep to be at 60k. Please see the link below:
https://macro-spectrum.com/opinion/us-nfp-sep25-preview
On 2nd Oct, Revelio labs came out their estimates of Sep NFP at exactly 60k. In the absence of actual labor data due to US shutdown, Revelio labs nos and ADP nos take importance.
https://www.reveliolabs.com/public-labor-statistics/employment/
Job gains continue to lose momentum across a range of indicators. ADP private employment declined 32k in September, along with negative backward revisions which also pushed August growth into negative territory.
ADP is not well correlated to monthly surprises in nonfarm payrolls, but it has been a reliable gauge of the underlying trend in employment growth, suggesting some further slowdown into year-end. The ISM services survey was also consistent with tepid job gains. The employment subcomponent ticked up modestly in September, but remains deep in negative territory for the fourth consecutive month.
Weakness in the labor market continues to be driven by a slowdown in hiring and labor demand. JOLTS job openings were essentially sideways in August after a decline in July, causing the V-U ratio to decline to a multi-year low of 0.98. This is consistent with a drop in the Conference Board labor differential, which fell to 7.8 in September.
The release of the jobless claims report was delayed due to the government shutdown, but state-level data suggest only a modest uptick in initial claims.
The government shutdown commenced on 1 October and is likely to continue into next week, as the political impasse appears unlikely to be resolved this weekend. The Trump administration has also threatened to fire thousands of federal workers during the shutdown.
We see a high likelihood of the shutdown continuing for at least another week. Reportedly, the Office of Management and Budget (OMB) is coordinating with government agencies to prepare layoff plans.
Despite uncertainty around a potential ruling/injunction by a court, we could see significant negative impact on October nonfarm payrolls (NFP). Separately, earlier this week, Office of Personnel Management (OPM) Director Kupor said that roughly 150k federal workers had accepted deferred resignation offers and, of those 150k, 100k would leave the government at the end of September. This suggests that October NFP (scheduled to print in early November) is likely to be weighed down by 100k due to DOGE-led deferred resignations and we expect the additional negative impact of 50k to be reflected in subsequent months.
