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Next Friday, the US employment report is due. Katherine Judge, Economic Analyst at CIBC Capital Markets, point out that a slight uptick in participation in April could have supported another solid gain of around 200K jobs.

Key Quotes:  

“Hiring bounced back in March following a weather-induced slowdown in job creation in the previous month. However, a slight uptick in participation in April could have supported another solid gain of around 200K jobs on the month which would still represent a slight deceleration in hiring on a trend basis, in line with an economy approaching full employment. That would leave the unemployment rate at 3.8%, the lowest reading we foresee for the US labor market ahead.”

“With the negative impact on wages from lower-wage workers being added back into the labor pool in March evaporating, April should have seen a trend-like 0.3% advance, leaving annual wage growth a tick hotter at 3.3%.”

“While higher wages amidst falling interest rate expectations will provide leverage for solid consumer spending ahead, growth in wages does not appear to be translating into higher inflation, leaving the Fed firmly on the sidelines for 2019.”

“We are above consensus on payrolls which should support the greenback and see yields rise.”