US: Private sector employment posts increase of 204k in April - Nomura

Analysts at Nomura explain that the US ADP employment report showed a private sector employment increase of 204k in April, broadly consistent with Nomura’s +210k forecast.

Key Quotes

“The previous two months were revised lower modestly. This report appears consistent with the continued underlying strength in the labor market and an economy that continues to grow above trend. In particular, the data do not suggest any material weakening of momentum despite modest declines in manufacturing survey indices in April.”

“For the BLS April employment report, scheduled for release this Friday, we forecast a 220k gain in nonfarm payroll employment. Average hourly earnings will likely increase 0.27% m-o-m (2.76% y-o-y), partly boosted by calendar effects, while we expect the unemployment rate to decline 0.1pp to 4.0%.”

“Overall, after getting through the weatherrelated choppiness of the first few months in 2018, we expect the report to highlight steady labor market strength, setting the stage for further declines in the unemployment rate later this year.”