After breathing a collective sigh of relief following Wednesday’s Federal Reserve meeting and Powell’s remarks, investors now anxiously await the April jobs report slated for release on Friday at 8:30 a.m.
The condition of the U.S. labor market continues to display signs of robust health and moderate tightness. The previous five labor market reports have consistently surpassed expectations in the pace of growth for new non-farm payrolls, while the unemployment rate remains near record lows.
Looking at the last three reports, the monthly average has stood at 267,000 nonfarm payrolls, with the six preceding reports averaging just below 250,000.
Can the April report uphold this favorable trajectory? And, how might markets respond?
Consensus among economists suggests that the pace of increase in nonfarm payrolls for April will likely settle around 243,000, a slight dip from March’s robust figure of 303,000.
The unemployment rate is anticipated to hold steady at 3.8%.
Median projections indicate that average hourly earnings may see a marginal deceleration from 4.1% to 4% on a year-on-year basis, while maintaining stability at 0.3% on a month-over-month basis.
Here’s a table displaying the forecasts provided by Wall Street investment banks for April’s jobs data.
TD Securities, UBS, and Santander express the most pessimistic views on employment growth, whereas Jefferies, Goldman Sachs, and RBC offer the most optimistic perspectives.
| Nonfarm Payrolls (k) | Unemp. rate (%) |
Average hourly earnings (m/m) | |
| 190 | 3.8 | 0.3 | |
| UBS | 200 | 3.8 | 0.3 |
| Santander | 210 | 3.8 | 0.3 |
| Citi | 215 | 3.8 | 0.3 |
| Mizuho | 215 | 3.8 | 0.3 |
| Societe Generale | 235 | 3.8 | 0.3 |
| Deutsche Bank | 240 | 3.9 | 0.3 |
| HSBC | 245 | 3.8 | 0.3 |
| BMO | 250 | 3.8 | 0.3 |
| Barclays | 250 | 3.8 | 0.3 |
| BofA | 250 | 3.8 | 0.4 |
| J.P.Morgan | 250 | 3.8 | 0.4 |
| Morgan Stanley | 250 | 3.8 | 0.3 |
| NatWest | 250 | 3.8 | 0.4 |
| Scotiabank | 250 | 3.7 | 0.3 |
| Wells Fargo | 250 | 3.8 | 0.3 |
| Nomura | 255 | 3.8 | 0.2 |
| BNP Paribas | 260 | 3.8 | 0.3 |
| RBC | 267 | 3.8 | |
| Goldman Sachs | 275 | 3.8 | 0.2 |
| Jefferies | 280 | 3.8 | 0.3 |
The S&P 500 index, as tracked by the SPDR S&P 500 ETF Trust ( SPY ) , has shown a positive performance on the day of the jobs report release in four out of the five previous instances. Notably, in all of these cases, the initial release of the report, before subsequent revisions, exceeded expectations regarding nonfarm payrolls.
The only time the S&P 500 recorded a negative return was on March 8, when it declined by 0.6%. Despite the monthly reading of nonfarm payrolls surpassing expectations (275,000 vs. 200,000), the report revealed a surprisingly higher-than-expected unemployment rate of 3.9% compared to the projected 2.7%, along with downward revisions to nonfarm payrolls for the months of January and December.
Therefore, recent reports suggest that the stock market tends to react positively to a strong jobs report, while it may weaken if the data reveals an increase in unemployment coupled with downward revisions to earlier estimates.
| Nonfarm payrolls | Date of release | First print (k) | Expectations (k) | S&P 500 1-day %chg |
|---|---|---|---|---|
| November | 199 | 185 | +0.46 | |
| December | 216 | 175 | +0.14 | |
| January | 353 | 185 | +1.05 | |
| February | 275 | 200 | -0.60 | |
| March | 303 | 214 | +1.04 |
Read now: Private Employment Increases By 192,000, Beats Forecasts: ‘Hiring Was Broad-Based In April’
Image generated using artificial intelligence via Midjourney.
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