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MS: Below Consensus For AHE As Workweek Increases

  • Morgan Stanley see NFP growth of 183k (private 154k), very close to consensus in a step down from the 236k in March.
  • The strong April seasonal hurdle should favor a weaker print (especially from professional services, leisure & hospitality and construction), whilst labor market indicators pointing towards labor hoarding mean less seasonal fluctuation in hiring should be a drag on April jobs numbers.
  • Balanced weather risks: the April survey week saw higher temperatures around the US but at the same time higher precipitation in the Midwest.
  • AHE seen increasing 0.2% M/M with the softer print driven by a step up in the workweek to 34.5hrs. With base affects fading, the Y/Y rate is on track to fall to 4.1%.
  • The unemployment rate is seen rising a tenth to 3.6% as participation increases from 62.62 to 62.69%. They expect participation gains and the slowing in job growth will push the u/e rate to 4.1% by end-23 and 4.3% by the end of 2024.

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