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#1 05-07-2019 12:44:36

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NFP: Detailed forecasts of 6 banks for today's NFP report

NFP: Detailed forecasts of 6 banks for today's NFP report

Today's main event is undoubtedly the June NFP US Employment Report.

Most analysts expect 150,000 to 180,000 new jobs to be created in June, after only 75,000 in May. The unemployment rate is expected to be stable at 3.6% this month.

Below are the forecasts of 6 major banks shortly ahead of today's NFP report:

Danske Bank
"The labour market has generally started to show signs of weakness, so we believe it is important to monitor employment growth, which is a strong indicator of a recession.

The average monthly increase in non-agricultural employment fell to 164,000 in 2019 from 223,000 in 2018. We expect 175,000 US jobs to be created last month. We expect an increase of 0.2% in average hourly wages and +3.1% year-on-year.

TD Securities
"We expect a 150,000 increase in payroll last month, after a small increase of 75,000 the previous month. In particular, we expect job creation in the manufacturing sector to remain moderate, capping at 9k for a third consecutive month."

"Similarly, we expect a slight rebound in employment in the service sector after the weak increase in May to +82,000 jobs. The household survey should show that the unemployment rate remains stable at 3.6%, while wages are expected to increase for the month of June by 0.3% m/m and 3.2% year-on-year."

National Bank Financial
"We expect employment growth in the United States to rebound to +180,000 last month after an increase of +75,000 in May. These previous figures, which were lower than expected, caused quite a stir."

"The unemployment rate remained at its lowest level in several decades in May and wage growth remains slightly above +3%."

"Non-farm employment in the United States rose by only 75k in May, with downward revisions, well below expectations. A better figure is expected for last month, with a median of 160k in a range between 140k and 185k. An increase of 160,000 would result in annual job creation of +1.5%."

"The unemployment rate, which was the subject of a separate survey, is expected to remain at a very low level of 3.6%. Average hourly wages could be the most sensitive figure for markets, with a consensus for a recovery of +0.3% on a monthly basis and +3.2% year-on-year. The latter is still below the highest level of the February 2019 cycle: +3.4%."

"The non-agricultural wage bill for last month will therefore attract even more attention than usual, especially since the May figure was very low (+75k) (the average from January to April was +195k). The consensus expects an increase of 160k, and our forecasts are slightly higher at +170k, given the probability of a return on investment for May's weakness."

"A somewhat low result, between 120k and 150k, would not have a significant impact on the market, but if we were to see another reading below 100k, the markets would probably consider this to mean a higher probability of a 50-basis point (Fed) rate cut, at least as an instinctive reaction".

"The biggest question is whether the disappointment of May (+75k) was some kind of anomaly or something that suggests continued or increasing weakness.

If the number of job creations rebounds this month, it could be evidence to give the Fed some room for maneuver; conversely, another disappointment would probably scare the Fed.

"We expect an increase of +100,000 jobs for US non-agricultural jobs."

"Anything worth having is worth going for - all the way." - J.R. Ewing



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