Dow Jones Industrial Average (DJIA) futures were up by 0.23% in Friday’s premarket hours ahead of the release of the non-farm payrolls report.
Dow Jones Industrial Average (DJIA) futures were up by 0.23% in Friday’s premarket hours ahead of the release of the non-farm payrolls report. The modest gain comes despite several predictions pointing to strong jobs growth in November.
Various surveys conducted show that more jobs are expected to have been created in November than in October. According to CNBC, Refinitiv’s consensus forecast was 180,000 jobs being created in November. A Dow Jones survey, on the other hand, expects 187,000 jobs to have been added last month. This is in contrast to the 128,000 jobs that were created in October.
Wall Street firm Jefferies is even more optimistic expecting that 87,000 more jobs created in November compared to two months ago The surge is partly attributed to the successful resolution of the General Motors’ strike. The strike involved close to 48,000 workers.
Stated Jefferies chief financial economist Ward McCarthy:
I think we’ll see 215,000 payrolls. I think the big feature will be the reversal of the negative effect of the GM strike.
Ahead of Friday’s trading session, Dow Futures contracts inched up by 64 points or by 0.23%. The cautious movement is similar to Thursday’s session where the index closed just 28 points higher. This was in contrast to a Wednesday surge.
The other major indices also rose modestly. The S&P 500 futures went up by 0.25% while the Nasdaq Composite Futures inched up by 0.38%.
Dow’s cautious movement could be as a result of the downside risks that were telegraphed by the ADP report released earlier this week. The report indicated that only 67,000 jobs were created in November. This, according to the Bank of America Merrill Lynch senior economist Joseph Song, was a source of concern. On average the US economy requires around 100,000 jobs to grow.
We’re expecting the job market to stay on this steady trajectory. That said the ADP number we got a few days ago suggests there could be some downside risk.
Last modified: September 23, 2020 1:21 PM