Today's Economic Data Docket - It's All About The NFP
Given the many mixed signals in recent data, this month’s Employment Report could prove especially important:
7:30: Federal Reserve Vice Chair Janet Yellen on “Finance and Economic Growth” (in Finland). Q&A scheduled.
8:30: Employment Report (April): Many moving parts. The sudden rise in initial jobless claims has raised concerns about the health of the labor market. However, we still forecast an increase of 175,000 in nonfarm payroll employment in April. First, claims figures earlier in the month – when the payroll statistics were collected – were much lower. Second, other labor market indicators – such as the Monster.com employment index, consumer attitudes about the job market, and the Institute for Supply Management (ISM) manufacturing employment index – were consistent with a healthy report. Nevertheless, news released over the last week, including the latest claims figures and the non-manufacturing ISM, point to downside risk to our below-consensus call. We forecast that the unemployment rate remained unchanged at 8.8%.
We discussed many questions related to the April Employment Report in yesterday’s US Daily. We see downside risk to employment growth from construction employment, which normally sees a seasonal upswing this time of year. The rise in jobless claims cannot be entirely explained by one-time factors, but this arguably matters more for next month’s Employment Report, given the timing of the increase. Arguments for significant upside risk are less compelling, in our view. The large scale hiring event by McDonald’s Corporation is likely related to natural turnover and seasonal demand, rather than a major business expansion. We find some evidence of seasonal effects in payroll “surprises,” but the results are over a small sample and therefore probably not reliable.
On total payrolls, GS: +175k; median forecast (of 86): +185k, ranging from +118k to +325k; last +216k.
On unemployment, GS 8.8%; median forecast (of 80): 8.8%, ranging from 8.6% to 9.0%; last 8.8%.
On earnings, GS +0.1%; median forecast (of 55): +0.2%, ranging from +0.1% to +0.5%; last: 0.0%.
10:00: New York Fed President William Dudley at press briefing on regional economy.
11:45: St. Louis Fed President James Bullard on the US economy.
15:00: Consumer credit (March): Continued increase. Recent consumer credit reports have shown a striking divergence in consumer borrowing by type of debt. On the one hand, non-revolving consumer credit – loans for automobiles, appliances, etc – has increased steadily since mid-2010. On the other hand, revolving consumer credit – mostly credit card debt – has continued to decline.
Median forecast (of 37): +$5.0bn; last +$7.6bn.
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