Its Over, page-12556

...this data tonight will likely determine near term market direction.

...the markets would be looking at possible sign of peak inflation if we get a big payroll miss and a subdued average hourly earnings/wages growth. What if we get a significantly higher wages growth but a slight payroll miss? Market may not like that.

April Payrolls Preview: Get Ready For A Big Miss

BY Zero Hedge
FRIDAY, MAY 06, 2022 - 08:44 PM
With the Fed unleashing the most aggressive tightening campaign in decades just days after US GDP unexpectedly printed negative - a technical recession just one more subzero quarter away - and both the US stock and housing market careening in scary reruns of the 1970s, the only pillar of strength the US has left is the overheating labor market. But, as we noted earlier today, even that is starting to crack.

Which is why tomorrow's April payrolls will be closely scrutinized, not just whether there is an unexpectedly poor jobs print further confirming that the US is on the verge of recession, but also for information on whether red-hot wage growth - a byproduct of the runaway wage-price spiral -  is finally cooling, and hinting at peak inflation.


So here's what Wall Street expects tomorrow, courtesy of Newsquawk:
The consensus expects 391k non-farm payrolls to be added in April, with the pace easing from recent averages as well as the prior rate. The breakdown of expectations by bank is as follows:

• Daiwa +500K
• JPM +475K
• Jeff +475K
• MS +475K
• SocGen +475K
• BNP +460K
• BofA +450K
• Barx +450K
• AP +440K
• RBC +420K
• HSBC +405K
• NW +400K
• Scotia +400K
• TD +400K
• BMO +380K
• Citi +360K
• CS +350K
• Miz +350K
• Nom +340K
• DB +300K
• GS +300K
• UBS +300K
• WF +300K
• Median +380K

It is likely that traders will place a great deal of emphasis on the average hourly earnings metrics given that the Fed is more focused on the inflation part of its mandate. Proxies of labor market progress have been mixed in the month: the ADP’s gauge of payrolls disappointed expectations and was below the analyst forecast range; although initial jobless claims inched up slightly comparing the reference periods for the March and April jobs reports, the four-week moving average has fallen, as have continuing claims; within the two ISM reports on business, the employment sub-indices both fell in the month, with the services sector down beneath the 50.0 neutral level. Meanwhile, other reports continue to note the tightness within labor markets, and there are some data points–like the Employment Costs Index–which continue to allude to strongly rising wages as consumer prices continue to rise.

HEADLINE EXPECTATIONS:

• Consensus expects 380k nonfarm payrolls (Wall Street's thought leader Goldman is at 300K) to be added to the US economy in April (vs the prior 431k), with the rate of payroll growth seen further easing below recent trend rates (3-month average at 562k, 6-month average at 600k, 12-month average at 541k).
• The unemployment rate is likely to fall by one-tenth of a percentage point to 3.5%; note, the FOMC projects the jobless rate will fall to that level this year, and currently forecasts it will remain there through the end of 2023, before moving up to around 4.0% in the longer-run. The central bank will next update its projections in June, but at his post-meeting press conference this week, Fed Chair Powell said that job gains have been robust in recent months, and noted that the unemployment rate has declined substantially.
• Average hourly earnings are expected to rise 0.4% compared to March, the same as last month's increase. On an annual basis, hourly earnings as expected to slow down modestly to 5.5% from 5.6% the previous month.