What to expect from the US employment report.
The US employment statistics for the month of May will be released at 8:30 AM ET/1230 GMT. What are the projections for the major pieces of that report?
- Change in nonfarm payrolls 180K estimate versus 263K last month
- Unemployment rates 3.6% estimate versus 3.6% last month
- Average hourly earnings month on month 0.3% estimateversus 0.2% last month
- Average hourly earnings year on year 3.2% estimate versus 3.2% last month
- Average weekly hours 34.5 estimate versus 34.4 last month
- Change in manufacturing payrolls 3K estimate versus 4K last month
- Participation rate came in at 62.8% last month
- Underemployment ratewas at 7.3% last month
Some clues from other employment trends:
- The four-week average of initial jobless claims was at 225K 4-weeks ago. It is currently at 215K.
- ISM manufacturing employment index came in at 53.7 versus 52.4 in April
- ISM nonmanufacturing employment index came in at 58.1 versus 53.7 in April
- The ADP employment estimate came in much weaker than expected at 27K vs 185K estimate. Smaller firms was the drag, with a -52K drop in jobs. Medium sized firms (50-499 employees) added 11k job. Firms with over 500 employees added 68K jobs
- Empire manufacturing index employment fell to 4.7 from 11.9 last month
- Philadelphia Fed employment index 18.2 versus 14.7 last month
- Kansas City Fed employment index rose to 5 versus 2 last month
- Richmond Fed manufacturing index employment component fell to 17 from 18 last month
- Dallas Fed manufacturing employment index rose to 11.6 from 4.6 in the previous month
- The Conference Board consumer confidence rose sharply in May with the jobs plentiful and jobs hard to get subcomponents each hitting new cyclical high and low respectively (strong)
The outlier of the 'clues' seems to be the ADP report and the Empire manufacturing index. The other regional indices were mostly higher (or steady). The ISM manufacturing and nonmanufacturing indices showed the employment components higher. Consumer confidence also support strong job growth.
The 4 week average for NFP is 205K, which is still a healthy clip given the length of the employment recovery.
The last time, NFP was negative for a month was back in September 2010. The lowest job gain in any one month was 15K in May 2016. There was a 18K increase in September 2017 and 20K in January 2011.
The low in 2018 was 108K in September. The low for 2019 was 56K in February.
