US Nonfarm Payrolls: A Step Down in Net Hiring - Nomura
Research Team at Nomura, expects the Bureau of Labor Statistics (BLS) to
report that US nonfarm payrolls increased by a net 175k jobs in April
(Consensus: 200k), suggesting a step down in net hiring from 215k in
March.
Key Quotes
“We have revised down
our forecast by 30k from our original estimate of 205k, as the April ADP
net private payrolls change came in well below market expectations, at
156k (Consensus: 195k, Nomura: 200k). Consequently, we revised down our
private payrolls forecast by the same magnitude, to 170k (Consensus:
195k) from 200k previously.
Industrial activity remains
challenged, as domestic demand for manufactured goods has yet to pick up
and the stronger dollar has made US exports less competitive abroad.
Thus, we forecast manufacturing payrolls shed another 10k jobs in April
(Consensus: -5k). Survey-based employment indicators have been choppy
and labor demand indicators have moved sideways in recent months.
In
addition, economic activity has been expanding at an unimpressive rate
to start the year. Taken together with today’s weaker-than-expected ADP
employment release, we see enough evidence to forecast a modest slowdown
in the official estimate of net payroll growth for April.
With
respect to the rest of the data, we expect the unemployment rate to tick
down to 4.9% (Consensus: 4.9%) on a rounded basis, as we believe the
increase reported for March to be temporary. Last, we expect that
average hourly earnings grew by 0.30% m-o-m (2.4% y-o-y) (Consensus:
0.3% m-o-m, 2.4% y-o-y) in April, following a 0.28% m-o-m increase in
March.”
