US non-farm payrolls likely increased by 160,000 in May – Danske Bank

Research Team at Danske Bank, suggests that the heavy US data calendar continues with the highlight of the week being the labour market report for May.

Key Quotes

“It could very well be pivotal to the market's pricing of a potential summer hike from the Fed. We estimate along with consensus that non-farm payrolls increased by 160,000 in May. Moreover, we estimate that the unemployment rate declined to 4.9% and that average hourly earnings increased by 0.2% m/m, implying a wage inflation rate of 2.5% y/y. Note that the ADP report came in completely in line with expectations at 163,00 in May. So, little new information from this labour-market indicator.

We will also see the release of the ISM non-manufacturing report. We expect a small setback to 55.2 in May (consensus 55.3) from 55.7 in April. But after the stronger-than-expected manufacturing ISM the risk is probably for a slightly higher number.”