After a poor March jobs report, followed by an April scorcher, the May payrolls report due at 8:30am on Friday will be the tiebreaker, not only for the current state of the economy where both soft and hard data have been deteriorating in recent weeks, but perhaps also for the June rate hike decision, which as the Fed noted in its May FOMC minutes, may not take place without “evidence” that the recent “transitory weakness” in the economy is over. Here are the consensus expectations for tomorrow’s report:
May Nonfarm Payrolls Exp. 185K (Range 140K to 235K) vs April 211K Unemployment Rate Exp. 4.4% (Range 4.30%-4.60%) vs April 4.4% Average Hourly Earnings M/M Exp. 0.20%, vs April 0.30%; Y/Y Exp. 2.60%, vs April 2.50% Payrolls Expectation
In terms of overall expectations, the consensus is looking for 185k nonfarm payrolls to be added to the US economy in May – the same as the April consensus – compared to 211k actual jobs added in April. That according to RanSquawk would be in line with the 185k/month pace seen in 2017 thus far. On one hand, there is potential for upside surprise, as per today’s stellar ADP report which came in at 253K, far above the 185K expected. On the other, Goldman believes a favorable swing in the weather between the March and April survey periods boosted last month’s hiring pace, and suggests the 211k pace of April job growth “likely overstates the near-term underlying trend”, as such there will be payback in the May report. Also, Goldman cautions that the ADP measure has been running above official private payroll growth so far this year, by 60k per month on average, so take it with a grain of salt.
This post was published at Zero Hedge on Jun 2, 2017.
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