Société Générale NFP preview (spoiler +160K, 4.4%, 0.2% m/m & 2.6% y/y, 34.4 hrs)

Author: Eamonn Sheridan | Category: News

Soc Gen with their nonfarm payroll thoughts

  • After a weak March print, payrolls rebounded by 211,000 in April, and the unemployment rate fell again to 4.4%. The bulk of the gain was driven by leisure (55,000), education/health (41,000), and professional business services (39,000), which together accounted for about 70% of the 194,000 rise in private job growth in the month.
  • In May, we expect that the labor market continued to strengthen, as job gains likely advanced by around 160,000.
  • Despite the March and April swings, the underlying pace of job growth remains fairly steady. Indeed, the 2017 year-to-date average of 185,000 is almost identical to last year's 187,000 average monthly rise. In any case, we expect some cooling in the leisure category, which could have posted a rise of 30,000 versus 55,000 in April, as well as in the education/health sector, which may have increased by 25,000 versus 41,000 in April. The April rise in this sector seems to have been influenced by an unusual jump in the social assistance category that may be unlikely to repeat. Meanwhile, job gains likely remained subdued in retail and manufacturing.
  • Elsewhere in the April report, we look for the workweek to have held steady at 34.4 hours.
  • Meanwhile, the unemployment rate may have been little changed at 4.4%. The drop in the unemployment rate from 4.8% in January has come alongside a 500,000 increase in the labor force. However, as we have noted previously, we remain wary of the some of the recent gains in the labor force given our view that population controls introduced in January may have impacted the figures.
  • In any case, average hourly earnings could have advanced by 0.2%, which would push the yoy rate to 2.6%.
Earlier previews here:
ps. Just noting Soc Gen's thoughts that we expect some cooling in the leisure category I am curious is Soc Gen have maybe picked up on the data I posted on here: U.S. market share of international tourism started to drop in October 2016, falling by 6 percent year-over-year 
I'm just interested out of curiosity really. I was unsure on how much credence to give the Foursquare data.

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