Nonfarm payrolls: Beware wage growth base effects - Nomura

Analysts at Nomura expect a solid 175k increase in nonfarm payroll employment during October, consistent with continued labor market strength in an economy operating above potential. 

Key Quotes:

"We expect average hourly earnings (AHE) to increase 0.2% m-o-m, held down in part by calendar effects."

"However, base effects are likely to push up the y-o-y rate 0.3pp to 3.1% as the sharp decline in AHE last October drops out of the calculation."

"After falling 0.2pp in September, we expect the unemployment rate to hold steady at 3.7%."