US NFP Preview: Goldman Sachs expects large, temporary drag from Omicron on the order of 500-1000K

Goldman Sachs (GS) cites survey data indicating a surge in absenteeism during the month to expect Omicron-led temporary declines in the US Nonfarm Payroll (NFP) data on the order of 500-1000K.

GS also mentions, “We estimate an unchanged unemployment rate of 3.9%—in line with consensus—reflecting likely declines in both household employment and labor force participation due to the virus wave.”

It’s worth noting that a negative surprise from US ADP Employment Change for January, to -301K versus +207K forecast, hints at a negative print of the headlines US job numbers. However, the broad consensus is still positive and hence may surprise the markets in case of an upbeat figure.

The same should propel the US dollar to consolidate the weekly losses, the biggest since  March 2020.

Read: Nonfarm Payrolls Preview: Win-win-win for the dollar? Low expectations, weak greenback point higher