MNI US Payrolls Preview: Tailwinds Ebb As Storm Gathers

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Executive Summary

• Nonfarm payrolls are seen increasing a seasonally adjusted 135k in April in the Bloomberg survey after a stronger than expected 228k in March.
• Primary dealer analysts also see 135k whilst the Bloomberg whisper is weaker again, currently at 120k.
• April won’t benefit from the favorable weather and returning strikers that helped March employment growth.
• Immigration restrictions are likely to increasingly drag on employment growth ahead although this month’s report could be a little early.
• There’s a similar argument for any adverse impact from tariffs, especially with weekly jobless claims proving robust. That said, some forward-looking measures look bleak.
• The unemployment rate is widely expected to round to 4.2% again after inching up to 4.15% in March from 4.14% in Feb. AHE growth meanwhile is mostly expected at 0.3% M/M with some mild downside skew.
• A solid report shouldn’t change the narrative ahead of next week’s FOMC meeting but a weak report might.
• Markets are pricing in nearly 70% probability of a cut by June, with 41bp through the end-July FOMC. Just over 100bp of cuts are seen through year-end, and we’ve seen the lowest terminal rates since September’s 50bp rate cut (around 3.00% per SOFR) as the negative growth impact of US tariff policy is assessed.