MNI US Employment Insight: Another Month Of Resilience

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Executive Summary

• Nonfarm payrolls were stronger than expected in April, rising a seasonally adjusted 177k (cons 138k) although a two-month revision of -58k offset the 39k beat.
• It leaves a three-month average of 155k, far above long-run breakeven estimates closer to 100k, which should start to become more binding with tighter immigration policy.
• The breakdown is one of general resilience. That includes transportation & warehousing implying no adverse impacts from tariffs although it could still be boosted by inventories climbing in tariff front-running.
• Average weekly hours worked were also encouraging compared to a recent low base, tentatively showing a second month without signs of companies further tamping down on costs via hours offered.
• The major indicators in the household survey contained mostly positive news versus expectations. The general trend remains of a slowly loosening labor market, but there were few signs of any major deterioration at the start of the second quarter.
• This picture of resilience is broadly echoed elsewhere, although ADP private employment has seen a more pronounced moderation and continuing jobless claims nudged above established ranges in the latest week. Soft data, especially on the consumer side, look softer however.
• Fed cut expectations were reduced further following a better than expected ISM manufacturing report and only just fully price a next cut with the July meeting before a little over 75bp of cuts for 2025 as a whole. 

• Barclays and Goldman Sachs formerly pushed back calls for a next Fed cut from June to July.