US: Expect steady job growth for May with medium-term risk – Nomura

Analysts at Nomura expect a solid 205k gain in US nonfarm payroll employment in May.

Key Quotes

“Labor market fundamentals have remained firm since April and we see some upside risk given the unusual weather patterns so far in 2018. We forecast average hourly earnings (AHE) to increase 0.2% m-o-m with only a small downward bias from calendar effects.”

“Finally, we expect the unemployment rate to remain unchanged at 3.9%. While the May employment report is likely to be strong, a potential slowdown in global growth could disproportionately affect US payroll growth as much of the recent surge has been concentrated in industries particularly sensitive to external growth.”