We expect a below-consensus gain of 25,000 private sector payroll jobs and an increase in the unemployment rate to 9.7%.

Goldman’s Andrew Tilton:

The September employment report will be released Friday at 8:30am.  We expect a below-consensus gain of 25,000 private sector payroll jobs and an increase in the unemployment rate to 9.7%.  A variety of labor market indicators, including this morning’s weak ADP Employment Report, look consistent with this forecast.  More simply, employment growth tends to follow GDP growth with a strong correlation and a slight lag – so weak growth data in recent months also points to job growth that is as soft or softer than that seen over the summer. We expect the Labor Department to announce a preliminary estimate of a small upward “benchmark revision” to payroll growth since March 2009.

…

Last Friday we issued our preliminary forecasts for the September employment report: a drop of 50,000 payroll jobs, composed of an increase of 25,000 private sector and a decrease of 75,000 government jobs, a rise in the unemployment rate to 9.7%, and an increase in average hourly earnings by 0.1%.  Incremental information over the past three days has not changed our views.  Most leading indicators look quite weak.

Via Goldman Sachs, A slow economy means a slow labor market, 7 October 2010

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