Nonfarm Payrolls Preview: Forecasts From 10 Major Banks For May Jobs Report

Nonfarm Payrolls Preview: Forecasts From 10 Major Banks For May Jobs Report

  • Market News
  • Special Report
  • 2021, 04 June

The US Bureau of Labor Statistics (BLS) will release the May jobs report on Friday at 17:00 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 10 major banks regarding the upcoming employment data. The economic calendar is pointing to an increase of 664,000 jobs in May after the disappointing 266,000 in April while the Unemployment Rate edging lower to 5.9% from 6.1%. 

Markets are in a temporary calm ahead of the critical Nonfarm Payrolls report. But a disappointing NFP print is likely to trigger a more significant reaction than a positive one, according to FXStreet’s Eren Sengezer.

Capital Economics

“With labour shortages weighing on hiring there is even more uncertainty than usual over May’s employment report, but we estimate that non-farm payrolls rose by a relatively subdued 500,000. The unemployment rate was probably little changed at 6.1%. Average hourly earnings continue to be distorted by the strength of low-wage hiring but, with widespread reports of major employers offering signing-on bonuses and higher starting pay, underlying wage growth looks set to accelerate over the coming months.”


“We expect a strong rebound in employment in May with follow-through in coming months. The US is still more than 8 million jobs shy of the level seen prior to the pandemic, and the economy is opening quickly as the vaccine drive takes effect. To our 800K call for May, there is arguably upside risk. This is also the case with respect to revisions to Apr. As more people come back to the labour market, the downtrend in the unemployment rate will slow. In May we only expect an incremental fall.”


“The school situation will end in September, while 23 states have already announced they are ending the payment of the $300 weekly unemployment benefit next month (with it ending elsewhere in September). Consequently, we should see labour supply come back, but we may face a window of perhaps 2-4 months where businesses struggle to fill their vacancies and employment disappoints. However, it also means that companies that do need to open and expand end up paying more for workers as competition for staff heats up. As such, we expect to see a softer than consensus 500K in jobs in May, with wage rates showing signs of picking up a touch.”

RBC Economics

“US Nonfarm Payrolls employment is expected to post an exceptionally strong increase (500K) in May as regions relaxed containment measures. Leisure and hospitality sector will account for most of the job gains.”


“Hiring should have strengthened in the month as the improving epidemiological situation allowed the reopening of broad swathes of the economy. Layoffs, meanwhile, could have gone down, judging from the decrease in initial jobless claims between the April and May reference periods. All told, payrolls may have increased 900K in the fifth month of the year. The household survey is expected to show a similar gain in employment, which would be consistent with a two-tick decline in the unemployment rate, to 5.9% (assuming the participation rate recovered some of the ground lost during the pandemic).”


“Payrolls are poised to grow by 575K, as higher wages likely enticed some to re-enter the labor force as services continued to re-open, but still generous government unemployment benefits could have been a barrier to more material growth. Furthermore, a skills shortage in some hot sectors including residential construction could have limited gains. The underwhelming employment gain is in line with the only modest drop in continuing jobless claims and would leave the unemployment rate a tick lower at 6.0%. Wages likely posted a more trend-like 0.2% advance following a sharp rise in April.”

Deutsche Bank

“We are expecting a bounceback in May, with a rise in Nonfarm payrolls of +800K, which in turn would see the unemployment rate decline to a post-pandemic low of 5.9%. We note that it’s also worth bearing in mind some of the distributional variables that the Federal Reserve are tracking, in addition to the main numbers, as they seek to achieve their maximum employment objective.”


“Payrolls probably rose strongly in May by pre-COVID standards, but we see some downside risk versus the consensus again this month. That is our takeaway from the timely, albeit not fully comprehensive, Homebase data. Our +500K forecast implies a still-sizable 7.7 M net decline from the pre-COVID level."

Wells Fargo

“While we don't suspect all the labor supply issues worked themselves out in May, we believe the jobs' recovery got back on track. We forecast employers added 800K jobs during the month and the unemployment rate ticked down to 5.9%. We will also be paying extra close attention to any revisions to prior month's data.”


“We think a 750K+ number is probably needed to keep June in play for a robust taper discussion and 1mln+ would make that ore likely whereas 500K might get FOMC there by Jackson Hole (Aug 26-28), but weaker readings could have tapering not seriously discussed until Q4 or beyond. We expect 760K new jobs in May which would make the weaker-than-expected 266K April reading look like the outlier as two out of three months would have added jobs at a 750K+ pace. However, the team admits it could be underestimating the extent to which labor shortages will hold back the number.”


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