Nonfarm payrolls preview: a somewhat soft 140k increase? - Nomura

Analysts at Nomura offered their preview for the forthcoming US employment report.

Key Quotes:

"We forecast a somewhat soft 140k increase in nonfarm payroll employment for March (Consensus: 185k), largely due to payback after warm weather pushed up February’s employment growth. 

"Despite this temporary weakness, monthly nonfarm payroll growth is likely to still average close to +230k for Q1 2018, indicating strong labor demand."

"With no calendar effect in March, we expect a steady 0.2% (0.22%) m-o-m increase in average hourly earnings (AHE), bringing the y-o-y rate to 2.7% (Consensus: 0.3% m-o-m)."

"Our m-o-m AHE forecast is only 3bp from 0.3% on a rounded basis, indicating some upside risk to our rounded estimate. Finally, we expect the unemployment rate to tick down 0.1pp to 4.0% after remaining at 4.1% for the past five months (Consensus: 4.0%)."