Us Non-Farm Payrolls Likely to rise in May
Next week is a big US data week, with non-farm payrolls, the ISM manufacturing survey, April personal consumption expenditure and inflation data. Regional business surveys have remained mixed lately, and the ISM manufacturing survey is expected to have been stable at 51.5, suggesting still-meagre industrial activity growth (services should continue to do most of the heavy lifting near-term). Standard Chartered notes: We forecast April core PCE inflation - the Fed's preferred measure - to have remained at 1.3% y/y. We think the labour market remained resilient despite recent weaker US data, and we forecast a US payroll gain of 240,000, a touch more than the 223,000 gain in April. Our optimism is supported by recent services surveys showing still-healthy employment intentions, and initial jobless claims touching 15-year lows. We see the unemployment rate staying at 5.4%. This should keep the Fed on track to raise rates later this year (our long-held view is that September's meeting is the most likely time).
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