According to analysts at TD Securities, Wednesday’s ADP Employment report surprise of 27k was enough of a miss, nearly 160k below consensus to convince them to reduce their forecast for Friday’s nonfarm payroll release to 140k for May, from their earlier estimate of 190k.
Key Quotes
“This soft but not concerning print follows an eye-popping 263k print in the previous month. As such, we would view a number in this mid-100k range as an overdue correction to an unsustainable run rate for payroll growth, rather than the leading edge of a sharp slowdown in economic activity “” although we recognize markets will take little comfort in the event.”
“All in, the household survey should show the unemployment rate remained steady at 3.6% for May, while wages are expected to rise 0.2% m/m.”
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