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Previewing Today's Nonfarm Payrolls Number: The Key Things To Look For

Tyler Durden's picture




 

From RanSquawk

Today's consensus expectations:

  • Change in Nonfarm Payrolls (Apr) Exp. 218K (Low 155K, High 292K), Prev. 192K, Feb 197K
  • US Unemployment Rate (Apr) Exp. 6.6% (Low 6.5%, High 6.8%), Prev. 6.7%, Feb 6.7%

What the banks expect:

  • UBS 180K
  • HSBC 195K
  • Bank of America 215K
  • JP Morgan 220K
  • Goldman Sachs 220K
  • Citigroup 225K
  • Deutsche Bank 240K
  • Barclays 250K

Quick take:

  • Headline expected at 218K, just below Wednesday's ADP employment change came in at 220k, the highest reading since November
  • Today's job report is not expected to alter the course of Fed monetary policy, especially as the June jobs report will be released before the next FOMC meeting
  • The April jobs report is the first this year which is not expected to be significantly influenced by weather conditions, as April was the first month since the winter that populous regions of the US did not experience a storm

Today sees the release of the US nonfarm payrolls for April, which is expected to show 218k jobs added. However, ahead of the figure analyst forecasts are quite evenly spread, with the majority lying between 195k and 230k.

The vast majority surveyed also expect the unemployment rate to decline to 6.6% from 6.7% in March, although the labor force participation rate (prev. 63.2%) has historically been a significant driver of a fall or climb in the unemployment rate.

In terms of recent data points, Wednesday's ADP employment change came in at 220k, the highest reading since November. The ADP report shares a very similar methodology to NFP, and although the correlation has been questionned in recent months, last month’s ADP reading was just 1k below the payrolls reading at 191k. Additionally, as noted by analysts at Deutsche Bank, the ‘jobs plentiful’ component of US consumer confidence is often a strong indicator of NFP, and that figure came in lower than previous on Tuesday at 12.9% (prev. 13.1%).

An additional point to note is that April was the first month since the winter that populous regions of the US did not experience a storm. Severe weather conditions were cited as a constraint on hiring during Q1, and Wednesday’s large GDP miss (0.1% vs. Exp. 1.2%) is widely being attributed to this factor. The BLS says volatile employment trends around the spring break period, rather than weather conditions can also account for yesterday’s higher than expected initial jobless claims for the week ended April 26th. Prior to that reading, the four-week average of weekly claims was at a post-recession low.

Market Reaction

As the Fed remain on track to taper their bond buying program, and with markets sensitive to projections for the first hike to the Fed Fund Rate (FFR), focus will likely fall on the unemployment rate unless the headline is widely away from expectation. An unemployment rate outside of the main expectation range will likely see a sustained reaction, and an adjustment to the current forecast, with the first hike of the FFR currently priced in for July 2015.

* * *

Finally, as compiled by Bloomberg, here are the Twitter forecasts:

 

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Fri, 05/02/2014 - 07:55 | 4719273 jay28elle
jay28elle's picture

My prediction is +2 jobs. "Weather", dah.

 

Fri, 05/02/2014 - 07:59 | 4719284 PR Guy
PR Guy's picture

 

 

 

Barclays are feeling bullish then. Buy buy buy!

Meanwhile, here's some light entertainment for you.

 

https://www.youtube.com/watch?v=7QPxDugs0Nw

Fri, 05/02/2014 - 08:08 | 4719298 GetZeeGold
GetZeeGold's picture

 

 

I wonder how many jobs Belgium is going to give us?

Fri, 05/02/2014 - 08:18 | 4719334 Headbanger
Headbanger's picture

Jobs?   The gubmint doesn't want us to have no stinking jobs!

Cause they want us completely dependent on them for every fucking thing in our lives now.

 

Fri, 05/02/2014 - 08:23 | 4719348 NoDebt
NoDebt's picture

I'm going with 700K jobs added.  All of them at check cashing stores and payday lenders.  Plus a few thou of fleet managers who move the unsold inventory of GM cars around from lot to lot.

Fri, 05/02/2014 - 08:24 | 4719351 JackT
JackT's picture

Who needs jobs when we have all of this cake to eat?!

Fri, 05/02/2014 - 09:33 | 4719757 lordylord
lordylord's picture

Government hates when people find jobs in the private sector and can support themselves.  Obama voters hate working.  It's a match made in heaven.

Fri, 05/02/2014 - 09:13 | 4719661 NoDebt
NoDebt's picture

Nailed it!

Fri, 05/02/2014 - 07:55 | 4719276 Charles Nelson ...
Charles Nelson Reilly's picture

I heard a rumor that if they get 250k, Biden will celebrate this afternoon at the White House happy hour by doing an inverted anal beer chug, and the n turn around and spray the syncophants in the crowd visiting that shithole

Fri, 05/02/2014 - 08:01 | 4719285 Jlasoon
Jlasoon's picture

Just got paid = Paid rent, paid water, paid hydro, paid internet, paid phone = "and it's gone"

What's the point?

Fri, 05/02/2014 - 08:10 | 4719305 GetZeeGold
GetZeeGold's picture

 

 

Thought alert!

 

Turn on CNBC....someone will be around to pick you up. You just won a trip to the Island!

Fri, 05/02/2014 - 08:28 | 4719365 Jlasoon
Jlasoon's picture

"You still think there's an Island?"

Lincoln Six-Echo

Fri, 05/02/2014 - 08:36 | 4719403 GetZeeGold
GetZeeGold's picture

 

 

Of course it exists......I heard about it on CNN.....but you have to go through a black hole to get there.

Fri, 05/02/2014 - 08:08 | 4719299 jmcadg
jmcadg's picture

Metals smash?

Fri, 05/02/2014 - 08:09 | 4719302 toros
toros's picture

It takes ~$10B to move the s&p index up 1 point at these levels.  GLWT

Fri, 05/02/2014 - 08:12 | 4719310 ejmoosa
ejmoosa's picture

158k tops.....

Fri, 05/02/2014 - 08:16 | 4719326 Chuck Knoblauch
Chuck Knoblauch's picture

Always loved the drama.

The banks already know the number.

All programmed into the ALGO.

Waiting for your trade.

Fri, 05/02/2014 - 08:18 | 4719331 GetZeeGold
GetZeeGold's picture

 

 

Skynet had the numbers yesterday.

Fri, 05/02/2014 - 08:31 | 4719379 DeadFred
DeadFred's picture

Skynet made up the numbers yesterday.

Fri, 05/02/2014 - 08:17 | 4719327 Fritz
Fritz's picture

It's all just more goal-seeked irrelevant bullshit.
The only thing that matters is: what will Citadel do (WWDC)?

Fri, 05/02/2014 - 08:25 | 4719353 rsnoble
rsnoble's picture

180k to 250k that pretty much covers it all right? LOL.  Not sure what the so-called whisper # is.

Does it really make a fkn diff with the digital zero masters at the helm?

Fri, 05/02/2014 - 08:28 | 4719372 SheepDog-One
SheepDog-One's picture

Gee, let's see.....come in over 250K stocks go higher....come in under 180K stocks go higher.....come in somewhere between and stocks go higher.

Wow, decisions, decisions.....

Fri, 05/02/2014 - 08:32 | 4719382 Jlasoon
Jlasoon's picture

Fuck jobs, its not about the stinking jobs. My cost of living is getting ridiculous. And I have a good job. 

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