Nonfarm payrolls rebounded in April, rising 223k, broadly in line with our (250k) and consensus (228k) expectations. However, there were net downward revisions of 39k to the previous months of payrolls, bringing estimated payroll growth in March to 85k (from 126k) and February to 266k (from 264k). This leaves the three-month average gain in payrolls at 191k, down from 317k in Q4, consistent with our view that the pass-through from lower energy prices to activity and employment would begin to fade by the end of the first quarter.
We look for monthly payroll growth to average 200-225k over the remainder of the year as economic activity rebounds off another soft Q1.
Altogether, we see this report as reducing concerns that weak Q1 growth represents a loss of economic momentum, but the report is not strong enough, in our view, to alter market expectations about the timing and pace of the rate hike cycle. We continue to look for the first rate hike in September.
Recommended Content
Editors’ Picks
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.