NFP Preview: Forecasts from 12 major banks, robust job growth

The US Bureau of Labor Statistics (BLS) will release the April jobs report on Friday, May 6 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 12 major banks regarding the upcoming employment data. 

Expectations are for a 391K rise in Nonfarm Payrolls following the 431K increase in March. The unemployment rate is expected to have contracted to 3.5% from 3.6% in the previous month while Average Hourly Earnings are expected at 5.5% YoY.

Commerzbank

“We expect a strong job creation of 350K in April, which would be only slightly less than in March (431K). The unemployment rate would then fall to 3.5%, the level immediately before the pandemic.”

Danske Bank

“We expect the job market continued to tighten in April, with an increase in nonfarm payrolls of ~400k and possibly a further drop in the unemployment rate to 3.5%.”

Deutsche Bank

“We expect NFP to gain 465K, the unemployment rate to tick down to +3.5%, and average hourly earnings to gain +0.2%.”

TDS

“We look for payrolls to have stayed solid in April, posting a similar figure to that of March. Indeed, we pencil in a net job gain of 400K. We also look for average hourly earnings to have advanced 0.3% MoM (5.4% YoY) after 0.4% in March. A strong report could perversely push the market to price in more tightening as the Fed reduced its optionality at its most recent meeting. That leaves a resilient USD vs EUR and yen very much the path of least resistance. A softer wages print should help to temporarily take the edge off but this will be short-lived until evidence of a peak/moderation in CPI emerges.”

Westpac

“We see job creation of 425K positions with a stable unemployment rate at 3.6%.”

SocGen

“We expect NFP to gain by 475K workers for April, modestly down from recent averages. We expect the unemployment rate to hold steady at 3.6% for April. Returning workers imply more labour available.”

RBC Economics

“The US unemployment rate is very low and employment is expected to rise another 400K in April. A tighter squeeze in labour markets will add more fuel to the inflation fire as firms bid up wage prices to secure scarce talent. There are already clear signs that strong household and business demand is outpacing the US economy’s domestic production capacity, further broadening inflation pressures.”

NBF

“Hiring should have continued at a strong pace in the month, as the epidemiological situation remained under control. Layoffs, meanwhile, could have gone down a bit, judging from a decrease in initial jobless claims between the March and April reference periods. All told, payrolls may have increased 375K. The household survey is expected to show a similar gain, a development which could leave the unemployment rate unchanged at 3.6%.”

Citibank

“We expect a continued slowing in the monthly pace of job gains in April at 360K, this will likely be the softest since April 2021 which could be a sign that worker shortages are now more clearly limiting job gains. Average hourly earnings should rise 0.5% MoM and 5.5% YoY in April, although with risks of an even larger increase while the unemployment rate in April is expected to fall modestly to meet the pre-pandemic low of 3.5%.”

CIBC

“Although job openings remain at lofty levels in the US, with the prime-age employment-to-population ratio only slightly below its pre-pandemic level, hiring likely slowed to 315K in April as the labor supply pool remains slim. Moreover, high-frequency indicators of activity in service sectors levelled off during the month as the Omicron subvariant spread, and the downside surprise in the Q1 GDP report could also portend a bit less vigorous hiring in goods sectors. Higher wages were likely still on offer as employers tried to overcome the labor shortage in some industries, with average hourly wages expected to show 0.4% growth on the month. The unemployment rate likely fell to 3.5%, its pre-pandemic level, on the still healthy employment gain. We’re below the consensus which could see the USD and bond yields fall.” 

Wells Fargo

“We have revised our forecast for April US NFP to 300K from 400K. Our forecasts for April Unemployment Rate and Average Hourly Earnings (MoM) remain the same at 3.5% and 0.4%, respectively.”

Goldman Sachs

“We estimate NFP rose by 300K in April. We estimate a one-tenth drop in the unemployment rate to 3.5%, reflecting a solid or strong rise in household employment partially offset by another 0.1pp rise in labour force participation to 62.5%. While labour demand remains at elevated levels and dining activity has returned to normal, seasonally-adjusted job growth tends to slow during the spring hiring season when the labour market is tight.”