Market Economics | Interest Rate Strategy - BNP PARIBAS ...

Key Data Preview
Chart 1: US Payrolls on the Upswing
Source: Reuters EcoWin Pro
Apr (f) Mar Feb Jan
Payroll Jobs k 165 162 -14 14
Unemployment Rate % 9.7 9.7 9.7 9.7
Key Point:
Nonfarm payrolls will pretty much match the March
pace with a 165k gain; the unemployment rate should
hold at 9.7%.
BNP Paribas Forecast: Payrolls to Stay Positive
US: Labour Report (April)
Release Date: Friday 7 May
We forecast a gain of 165k jobs in nonfarm payrolls in April
after a 162k increase in March. The tone of the report will
be a little less positive than March as the composition of
hiring will be more tilted to temporary Census workers who
we look to account for 110k jobs after a 48k gain a month
prior. Meanwhile, private sector hiring is expected to stay
positive, but to fall back somewhat from the March pace
(this was boosted by weather-related swings). Private
sector hiring is expected to add 70k after a 123k gain in
March. The construction sector should see job losses
resume after a recovery from February weather disruptions
last month. The manufacturing sector should continue to
add to nonfarm payrolls, as should the private service
sector led by temporary hiring. Meanwhile, state and local
governments are expected to continue to weigh on overall
job growth as governments grapple with the ongoing
budget crisis. The lack of downward momentum in initial
jobless claims highlights that hiring is picking up gradually.
We expect job growth will keep pace with labour force
gains and for the unemployment rate to hold steady at
9.7%. Hours worked should post a robust gain, leading to
an improvement in disposable income for consumers while
average hourly earnings are expected to remain soft.
Chart 2: Canadian Employment
Source: Reuters EcoWin Pro
Apr (f) Mar Feb Jan
Unemployment rate % 8.2 8.2 8.2 8.3
Payroll jobs (k) 20.0 17.9 20.9 43.0
BNP Paribas Forecast: Upward Momentum
Canada: Labour Report (April)
Release Date: Friday 7 May
We expect Canadian employment to increase by 20.0k in
April, marking the fourth consecutive monthly rise.
While the labour market remains on a healthy rebound, the
pace of improvement has eased slightly compared to the
beginning of the year, pointing to some moderation in
economic growth. Indeed, hours worked slipped 0.4% in
March, following a three-month run of gains that saw backto-back
0.2% rises in January and February and a 0.6%
jump in December.
Earnings growth should also remain subdued in April,
supportive of our expectations for non-threatening
underlying inflation.
We forecast the unemployment rate to remain unchanged
at 8.2% as the expected monthly gain in employment
should largely offset an increase in the labour force.
Key Point:
Canadian employment should increase further in
April, but wage gains are set to remain subdued.
Market Economics 7 May 2010
Market Mover
71
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