Here's What 12 Top Economists Are Saying About Tomorrow's Huge Jobs Number

Michelle GirardRBS’s Michelle Girard

Photo: Bloomberg

Investors are waiting patiently for tomorrow’s employment situation report released by the Bureau of labour Statistics.All eyes will be on the nonfarm payrolls report in the U.S., with consensus calling for the addition of 150,000 net jobs in May.

Everyone has an opinion on what will drive that figure, either up or down (evenĀ Business Insider weighs in, with a projection for 130,000 new jobs).

We rounded up 12 of the top U.S. economists’ predictions.

Nomura: +95,000

'Measures of consumers manufacturers' sentiment reveal heightened anxiety about the outlook and we suspect this translated into hiring plans put on hold in May. The winter months in the US were exceptionally warm by historical standards. We find that when winter weather is warmer than average -- and hiring occurs earlier than usual -- payback, i.e., fewer jobs than usual, is concentrated in the May employment report. Historically, excessively warm January-April periods are associated with downsize surprises to nonfarm payrolls estimates.'

-- Ellen Zentner, Nomura

Jefferies: +135,000

'Private payroll growth has benefited from small and medium-sized business hiring. Large firms have not been hiring to any significant degree. Small and medium size firm hiring in the ADP data has been disappointing March, April and May.'

-- Ward McCarthy, Jefferies

Bank of America Merrill Lynch: +140,000

'We expect non-farm payrolls to increase 140,000 in May and the unemployment rate to increase to 8.2% from 8.1%.'

-- Ethan Harris, Bank of America Merrill Lynch

BMO Capital: +140,000

'The unemployment rate should stay at 8.1%, a three-year low and down nearly 2 pts from October 2009's high of 10.0%, though still more than 2 pts above the Fed's desired goalposts of 5.2% and 6.0%. Ever wonder why Chairman Bernanke isn't doing back-flips over the lower jobless rate? It's largely because the employment rate (the share of the adult population with jobs) has hardly budged since October 2009, while the labour force participation rate (the share of the adult population with a job or wanting one) has dropped 1.4 pts to a three-decade low. That's not a sign of a healthy labour market. The other reason is he probably can't.'

-- Sal Guatieri, BMO

RBC: +140,000

'We anticipate a 140K print for headline NFP in May and a touch better 150K for private payrolls. The potential for more weather payback in the construction sector coupled with a likely reversal in retail hiring (after a very firm print in April) should weigh on the results. This would put the three-month moving average for headline at a soft 136k and solidify, in our view, at least one of the pre-conditions for more QE.'

-- Tom Porcelli, RBC Capital Markets

Barclays: +150,000

Deutsche Bank: +150,000

'I think what is key about the jobless claims is that the four-week moving average is 370,000. In this week last year, average claims were 434,000 and the year before claims were 460,000. Things are better. As long as claims are 370,000 and potentially lower, then job growth will be above what we've seen in the last three months. Private employment has been revised up in 22 of the last 23 months.'

-- Joseph LaVorgna, Deutsche Bank

Bank of Tokyo-Mitsubishi UFJ: +160,000

'Today's data don't change our thinking, but the jobs report tomorrow could well do. The Conference Board consumer survey is saying jobs are harder to get this month, and Challenger grey's tally of job cuts jumped mostly due to Hewlett-Packard, but we will still stay with 160K jobs as a forecast for tomorrow, and a one-tenth decline in the unemployment rate to 8.0%. Whatever happens, try to keep it in perspective, the economy is not going off the rails. Europe or not, the U.S. is on track to create between 2 and 2.5 million jobs this year, the same as last year, and the same speed as the prior two recoveries from recessions in 1990-91 and 2001.'

-- Chris Rupkey, Bank of Tokyo-Mitsubishi UFJ

J.P. Morgan Chase: +165,000

'With all of this in mind, we think the May report will be somewhat better than the March and April reports but not as strong as the reports between December and February. By sector, we believe that private goods-producing industries added 15,000 jobs in May, private service-producing industries added 160,000 jobs, and government payrolls decreased by 10,000, consistent with the recent trend for the public sector.'

-- Michael Feroli, J.P. Morgan

Credit Suisse: +170,000

'A technical bounce is behind our May call. There was unusual softness in April relative to prior trends in three specific service sectors -- transportation and warehousing, leisure and hospitality, and education and health services. We look for all three industries to be the main swing factors leading to a relative improvement over April's performance. Fundamentals remain consistent with solid expansion in payrolls. The leading Employment Trends Index rebounded strongly in April and initial jobless claims so far in May are running below the April average.'

--Neil Soss

RBS: +175,000

'In May, we look for a rebound in construction payrolls following three straight monthly declines. Importantly, though the weather-related boost has faded, activity in the housing sector this spring remains stronger than it was last fall. In addition, we look for manufacturing payrolls to have expanded in May by 30,000, the same as in April and in line with the three-month trend. In service-producing sectors, the performance may have been somewhat mixed. Retail hiring (which bounced by 29,000 in April following back-to-back declines in the prior two months) may have been more restrained in May.'

-- Michelle Girard, RBS

UBS: +175,000

'After weeks of second-tier data and the markets taking their cues from Europe, the US gets an initial look at top-tier May data. We expect the May employment report to indicate that nonfarm payrolls rose 175k (private payrolls 185k) and that the unemployment rate fell a further 0.1 point to 8.0%.'

-- Maury Harris, UBS

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