The following is Barclays Capital's reaction to today's US April jobs report.
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.
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.
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