Is the risk associated with the NFP release on the downside or the upside?
The latest NFP release suggested that “The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by about one-half million to 5.1 million in January. Nearly all of this increase occurred in the private sector and may reflect the impact of the partial federal government shutdown.”
If this holds then could we expect that the US government shutdown would have caused an additional negative impact to the overall slowdown in the economy. Most importantly, it is also likely that the number of payrolls was overstated in the latest NFP release as some people could have potentially been double-counted, i.e. they worked both in the government and the private sector during the shutdown.
If this is the case, can we expect further downside potential for payrolls?
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Dr Nektarios Michail
Market Analyst
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