US data preview: nonfarm payrolls in the limelight - Nomura

Analysts at Nomura offered a preview of today's US data, with nonfarm payrolls as the key event.

Key Quotes:

"Employment report: We expect nonfarm payrolls to have increased by 185k (Consensus: 190k) in April and private payrolls to have increased by 180k (Consensus: 188k), implying a 5k gain in government jobs. Recent data on employment point to a return to trend in job creation following a downside surprise in March, which was likely due to temporary factors. Including March’s lower-than-expected reading, nonfarm payroll employment has an average increase of 178k over the first three months of 2017. Moreover, labor market indicators from the Philly Fed and Empire State surveys improved further in April, indicating steady hiring activity in the manufacturing sector. In this regard, we expect an increase of 15k for manufacturing employment (Consensus: 10k). Additionally, initial jobless claims and continuing claims remain subdued and currently hover near the lowest levels in the past three decades. From the household survey, we expect the unemployment rate to remain unchanged at 4.5% as increases in household employment will likely revert to trend after two months of outsized gains (Consensus: 4.6%). Favorable labor market conditions over the past three months may also motivate discouraged workers to re-enter the labor force in search of employment. Regarding average hourly earnings, we expect a healthy 0.33% m-o-m (2.69% y-o-y) increase (Consensus: 0.3% m-o-m, 2.7% y-o-y), a slight uptick from March’s 0.2% m-o-m (2.67% y-o-y) increase. Read more: April Employment Preview, Economic Insights, 3 May 2017."

"Consumer credit: According to the Federal Reserve report, consumer credit increased $15.2bn in February, which is slight acceleration from the $10.9bn increase in January. Revolving credit, which primarily consists of credit card loans, rebounded by 3.5% in February after an unexpected 3.2% drop in January. Nonrevolving, such as education and auto loans, continued to increase at a steady pace of 5.3%. As consumer fundamentals remain firm, we expect consumer credit to have expanded at a steady pace in March (Consensus: $14.0bn)."