SocGen: Above Consensus Payrolls Call

SocGen see above consensus payrolls growth being led by strong hiring in retail franchises but are more in line with other areas of the report.

• Total nonfarm payrolls growth expected to see a modest acceleration to 440k in May after the 428k, driven by strong hiring in retail franchise, including restaurants and hotel chains that are still struggling to find employees and return to normal operations.
• The unemployment rate is seen dipping to 3.5% after holding steady in April at 3.6% whilst participation should rise slightly from 62.2%.
• As the u/e rate dips further below the long-term normal level (4.0% according to the Federal Reserve and 4.4% according to the Congressional Budget Office), each decline should be more challenging.
• Wages are moderating slightly in trend terms but are still expected to rise +0.4% M/M after the +0.3% M/M, with the pace still too high and adding to inflation and profit margin concerns whilst productivity has declined.