US nonfarm payrolls to have increased by 185k in April - Nomura

The analysis team at Nomura expects US nonfarm payrolls to have increased by 185k (Consensus: 190k) in April and private payrolls to have increased by 180k (Consensus: 188k), implying a 5k gain in government jobs.

Key Quotes

“Recent data on employment point to a return to trend in job creation following a downside surprise in March, which was likely due to temporary factors. Including March’s lower-than-expected reading, nonfarm payroll employment has an average increase of 178k over the first three months of 2017. Moreover, labor market indicators from the Philly Fed and Empire State surveys improved further in April, indicating steady hiring activity in the manufacturing sector. In this regard, we expect an increase of 15k for manufacturing employment (Consensus: 10k). Additionally, initial jobless claims and continuing claims remain subdued and currently hover near the lowest levels in the past three decades.”

“From the household survey, we expect the unemployment rate to remain unchanged at 4.5% as increases in household employment will likely revert to trend after two months of outsized gains (Consensus: 4.6%). Favorable labor market conditions over the past three months may also motivate discouraged workers to re-enter the labor force in search of employment. Regarding average hourly earnings, we expect a healthy 0.33% m-o-m (2.69% y-o-y) increase (Consensus: 0.3% m-o-m, 2.7% y-o-y), a slight uptick from March’s 0.2% m-o-m (2.67% y-o-y) increase.”