Nonfarm Payrolls Preview: Forecasts from eight major banks for April jobs report

The US is expected to report an increase of 978,000 jobs in April, topping March's 916,000 increase. Economists expect the Unemployment Rate to drop from 6% to 5.8% and earnings are projected to drop. Uncertainty about such robust hiring implies surprises are due, with some expecting 1.3 million positions gained.

Here you can find the forecasts of economists and researchers of eight major banks regarding the upcoming employment data.

See: GBP/USD to surge above 1.40 on a soft NFP reading – TDS

Capital Economics

“The easing of restrictions and the boost from stimulus cheques are why we estimate that Nonfarm Payrolls increased by a massive 1,200,000 in April, up from 916,000 the month before. We are assuming that stronger labour market conditions and the gradual return of in-person schooling will encourage more of the 4 million dropouts from the labour force to return, which should limit the decline in the unemployment rate, which we think will fall to 5.6% in April, from 6.0%. With the mix of jobs being created still skewed towards the low-wage leisure and hospitality sector, we anticipate average hourly earnings declined by 0.2%. The anniversary of the collapse in leisure sector employment this time a year ago means the YoY rate of wage growth will plunge to -0.6%, from +4.2%.” 

NBF

“Hiring should have remained solid in the month as the improving epidemiological situation allowed the reopening of broad swathes of the economy. Layoffs, meanwhile, could have gone down, judging from the decrease in initial jobless claims between the March and April reference periods. All told, payrolls may have increased 1,000K in the fourth month of the year. The household survey is expected to show a similar gain in employment, which would be consistent with a two-tick decline in the unemployment rate, to 5.8% (assuming the participation rate recovered some of the ground lost during the pandemic).”

Westpac

“In April, we look for 1.1 M new jobs and believe further upward revisions to prior months could also be seen. Despite this rapid momentum in employment, the downtrend in the unemployment rate is likely to slow through mid-year as participation begins to rise back to more normal levels. This trend is likely to emerge slowly, gaining pace as the caseload reduces and work restrictions lift.”  

CIBC

“The stage is set for a rebound in employment growth, one year after the pandemic caused the single worst drop in payrolls on record. Jobless claims fell over the reference period, mobility at retail and recreation locations reached pandemic highs, while vaccinations allowed re-openings to continue in most states. Anecdotal evidence from the Federal Reserve’s Beige Book suggests that hiring in leisure and hospitality was particularly strong, along with construction and manufacturing. It’s, therefore, likely that 1.2 M jobs were created in April, pushing the unemployment rate down to 5.8%. Job gains being tilted towards lower-paying industries likely resulted in average hourly wage decreasing by 0.2%.”

Deutsche Bank

“We are expecting Nonfarm Payrolls to have grown by another +1.275 M, which would follow the strong +916K reading in March.”

Citibank

“We expect another strong month of US job gains in April, with 1150K total jobs and 1 million private-sector jobs added. Similar to March, jobs gains should be broad-based across sectors as activity normalizes with increased vaccinations. The team expects a 0.1% MoM increase in average hourly earnings in April and the US unemployment rate to fall to 5.8% in April from 6.0% in March based on strong rehiring and dynamics in the household survey of employment similar to last month.” 

Goldman Sachs

“Estimate Nonfarm Payrolls rose 1,300K in April. Estimate a five-tenth decline in the unemployment rate to 5.5%, reflecting rapid job gains partially offset by an expected rise in the participation rate. Estimate a flat monthly reading for average hourly earnings due to negative composition and calendar effects; coupled with the anniversary of the spring 2020 lockdowns, we estimate the year-on-year rate will plummet from +4.2% to -0.4%.” 

TDS

“Payrolls probably surged again, helped by fiscal stimulus and an easing of COVID-19 restrictions, albeit not quite to the same degree as in March (916K). We expect that NFP increased by 875K in April, with the caveat that uncertainty about seasonal adjustment raises the potential for surprise. The unemployment rate likely fell again.”