nonfarm payrolls and the consensus estimate
- Consensus estimate +190K (range +100K to +293K)
- Private +165K
- February +311K
- March +236K
- April +190K
- Unemployment rate consensus estimate: 3.5% vs 3.4% prior
- Participation rate prior 62.6%
- Prior underemployment U6 6.6%
- Avg hourly earnings y/y exp +4.4% y/y vs +4.4% prior
- Avg hourly earnings m/m exp +0.3% vs +0.5% prior
- Avg weekly hours exp 34.4 vs 34.4 prior
Here’s the May jobs picture so far:
- ADP employment 278K vs 170K expected
- ISM manufacturing employment 51.4 vs 47.1 prior
- ISM services employment 51.3 vs 50.8
- Challenger Job Cuts +80.1K vs +67.0K prior
- Philly employment -8.6 vs -0.2 prior
- Empire employment -3.3 vs -8.0 prior
- Initial jobless claims survey week 225K vs 252K expected
The big storyline is that non-farm payrolls have beaten the consensus estimate for 13 consecutive months, an unprecedented run that dates back to March 2022. Seasonals aren’t much help in May with the headline payrolls print coming in above estimates 50% of the time and missing 50% of the time, on average. However for the unemployment rate, 54% of previous reads in May have been lower than expected, 31% have been higher-than-estimates, and 15% have matched forecasts.
In terms of the market reaction, I think the Fed comments about skipping a June hike have neutered this report, at least to some extent. They’ve made those comments in light of recent strong data, including today’s ADP. There’s a limit to that though and something like +400K might cause yet-another rethink. However there are no speakers on the docket post-NFP and the Fed blackout starts Friday at midnight.
At the moment, the US dollar is vulnerable to a downside miss because it could put another bid into bonds and re-start the talk of peak Fed funds.