The US Bureau of Labor Statistics (BLS) will release the April jobs report on Friday, May 5 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of six major banks regarding the upcoming employment data.
Expectations are for a 179K rise in Nonfarm Payrolls following the better-than-expected 236K increase recorded in March. Meanwhile, the unemployment rate is expected to stay at 3.5% and average hourly earnings are expected to remain steady at 4.2% YoY.
CIBC
“We expect total hiring to have slowed to a 160K pace in April. That likely caused the unemployment rate to tick up to 3.6%. Wage growth could have continued at a 0.3% pace, but the risks to that figure are to the downside, as hiring was likely concentrated in lower-paying services where labor shortages still remain. We’re slightly below the consensus on the payrolls figure, which could weigh on the USD and cause bond yields to fall.”
Citi
“The pace of monthly payroll growth should continue to slow back towards a more typical pre-pandemic pace, likely reflecting some combination of easing labor demand and a shrinking pool of available workers to hire. We expect payrolls to rise by 215K in April with roughly balanced risks. We also expect a 0.4% MoM increase in average hourly earnings in April, stronger than over Q1 of this year. Meanwhile, the unemployment rate is expected to remain unchanged at 3.5% in April, with downside risks that it falls further to 3.4%. This expectation is based on the participation rate moving sideways after months of increases.”
Danske Bank
“Our call is for a slightly moderating but still solid jobs growth of 200K.”
RBC Economics
“We expect to see 150K jobs to be added to the US labour market in April, down slightly from the 236K increase in March. We look for a 0.1 percentage point increase in the unemployment rate, back to February’s 3.6% level.”
Commerzbank
“We forecast a job gain of 240K, which is above the consensus expectation. The April report will thus likely lead to renewed discussions about the ‘true’ situation in the US labor market. Weakening tendencies were recently more apparent in certain details such as the declining number of hours worked and the minus in temporary help jobs, which are considered leading indicators. Therefore, such subtleties should also be looked at.”
NBC
“We expect job creation to have slowed to 185K in the month. The household survey should show a slightly smaller gain following March’s outsized surge, but the latter should however be sufficient to keep the unemployment rate unchanged at 3.5%.”
United States Nonfarm Payrolls
The Nonfarm Payrolls released by the US Bureau of Labor Statistics presents the number of new jobs created during the previous month in all non-agricultural businesses. The monthly changes in payrolls can be extremely volatile due to their high relation with economic policy decisions made by the Federal Reserve. The number is also subject to strong reviews in the upcoming months, and those reviews also tend to trigger volatility in the Forex board. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish), although previous months' reviews and the unemployment rate are as relevant as the headline figure, and therefore market's reaction depends on how the market assets them all. Read more.
Next release: Fri May 5th, 2023 12:30
Frequency: Monthly
Source: US Bureau of Labor Statistics
Why it matters to traders?
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
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