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MNI US Payrolls Preview: Does Prior Household Survey Weakness Hint At A NFP Miss?

The March payrolls report should be mostly free from prior distortions, with the previously large discrepancy between employment measures watched closely

EXECUTIVE SUMMARY

  • Bloomberg consensus sees nonfarm payrolls growth of 213k in March after a strong 275k in Feb.
  • Watch two-month revisions after the February report’s -167k – response rates have improved but are still on the low side historically.
  • There has been particularly wide divergence between payrolls and household survey employment growth over the past three months – we expect a bounce in the household survey and potential for a modest downside surprise for March payrolls.
  • With increased focus on immigration, the u/e rate should help guide on broader labor market balance. We don’t expect it this month, but it wouldn’t take much of an upside surprise to see expectations of an overshoot of the FOMC’s recently lowered 4.0% forecast for end-2024.
  • AHE growth is broadly seen returning to a more trend-like 0.3% M/M after weather distortions through Jan-Feb. UBS do however see upside risk from a calendar effect.
  • FOMC pricing is off highs seen after Monday’s ISM manufacturing survey but still only has a first cut coming in July before less than 70bp of cuts for the year.

PLEASE FIND THE FULL REPORT HERE:

USNFPApr2024Preview.pdf


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EXECUTIVE SUMMARY

  • Bloomberg consensus sees nonfarm payrolls growth of 213k in March after a strong 275k in Feb.
  • Watch two-month revisions after the February report’s -167k – response rates have improved but are still on the low side historically.
  • There has been particularly wide divergence between payrolls and household survey employment growth over the past three months – we expect a bounce in the household survey and potential for a modest downside surprise for March payrolls.
  • With increased focus on immigration, the u/e rate should help guide on broader labor market balance. We don’t expect it this month, but it wouldn’t take much of an upside surprise to see expectations of an overshoot of the FOMC’s recently lowered 4.0% forecast for end-2024.
  • AHE growth is broadly seen returning to a more trend-like 0.3% M/M after weather distortions through Jan-Feb. UBS do however see upside risk from a calendar effect.
  • FOMC pricing is off highs seen after Monday’s ISM manufacturing survey but still only has a first cut coming in July before less than 70bp of cuts for the year.

PLEASE FIND THE FULL REPORT HERE:

USNFPApr2024Preview.pdf