Forex Institutional Research: RBS NFP Preview

Forex Institutional Research: RBS NFP Preview

Key quotes from the RBS NFP report: 

Balance of Risks Neutral

RBS Forecast 170,000 headline,160,000 private

Bloomberg Consensus 160,000 headline,150,000 private

Bottom Line Our forecast looks for a modest pickup in the pace of employment growth versus April. Both overall and private payrolls will be reduced by nearly 40,000 as a result of striking Verizon workers (a “special factor” the Fed will look through). Taking that drag into account, we look for payrolls in May to have increased by 170,000 (i.e. excluding the Verizon strike, our forecast would be +210,000), and we look for private payrolls to have advanced by +160,000 (i.e. +200,000 ex-Verizon). While these results would arguably meet the threshold for action in June, policymakers may still choose to wait for more information on inflation trends and the outcome of the UK vote before acting.

Nonfarm Payrolls: Consensus vs. Actual The Month of May Over the past 10 Mays, 60% upside surprises (average +47K) and 40% downside surprises (average -98K) with an average absolute surprise of 67K (above normal surprise size)

2015 Payrolls Cheat Sheet

Nonfarm Payrolls: Consensus vs. Actual Last 12 Months Over the past 12 months, 50% upside surprises (average +50K) and 50% downside surprises (average -34K) with an average absolute surprise of 42K (lower than normal surprise size)

2015 Payrolls Cheat Sheet

2015 Payrolls Cheat Sheet

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