ADP private non-farm payrolls unexpectedly rose, 296 to 148,000.Using first-order difference regression here postal Nowcasting BLS Private NFP, what does the picture look like?
First, the data we have now, and the Bloomberg consensus level.
figure 1: BLS Private Nonfarm Payrolls (black. Left log scale), Bloomberg Consensus 5/3 (red squares, left log scale), ADP Private NFP (green, right log scale), Bloomberg Consensus 5/3 (green squares, Right logarithmic scale), all in 000, sa Source: BLS and ADP, via FRED, Bloomberg and author’s calculations.
Here is the forecast for the regression (updated to include March data from BLS series, April data from ADP; adj-R2 = 0.66)
figure 2: First-order difference recorded for BLS private NFP (black bold), April nowcast based on ADP data (light blue), +/- one standard error band (gray line), Bloomberg consensus 5/3 (red squares). Sources: BLS, ADP, Bloomberg, and authors’ calculations.
The point forecast is for 0.14% m/m growth, or an increase of 267,200, compared with the Bloomberg consensus of 160,000. Note that the graph above shows +/- one standard error band; +/- 2 standard error bands (barely) cover the Bloomberg consensus.
Interestingly, CME fed funds futures are showing slightly lower chances of a rate hike today, but slightly higher chances at the June meeting (relative to yesterday’s futures contract).
