Executive Summary
- Nonfarm payrolls are expected to partially rebound in May from April’s surprisingly low 175k, with 188k in headline gains per MNI’s sell-side analyst median.
- While still an acceleration from the prior month, the consensus outcome if realized would be seen as reinforcing the view that the labor market has shifted into a softer but still-solid phase of growth.
- The rebound is seen being led by a recovery in government job gains. Private payrolls are seen posting a fairly flat rise of roughly 160k, vs 167k in April, with health and social assistance sector payrolls still providing the biggest boost.
- Bloomberg consensus sees payrolls growth of 185k, with private payrolls up 165k.
- Other key statistics are seen remaining relatively steady, including the unemployment rate (April: 3.9%, or 3.86% unrounded), with average hourly earnings ticking up to 0.3% M/M (April: 0.20% M/M unrounded).
- This report will be a key input into Federal Reserve policymakers’ deliberations at the June 11-12 meeting, thus potentially amplifying the market reaction in the event of an out of consensus figure.
- That said, a significant downside surprise would be most impactful, as it could force the FOMC to keep the door open to a cut as soon as July.
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