US NFP preview: Another strong month for average hourly earnings - Wells Fargo

Next Friday, the US official employment report will be released. Analysts from Wells Fargo, expect payrolls to have increased by 195K in April and another strong month for average hourly earnings. 

Key Quotes: 

“Nonfarm payrolls rose 103,000 in March, below expectations. The three-month average gain remains at a solid 202,000 jobs, suggesting strong underlying momentum. Weather played a role in the lower March job gain; construction jobs–which are particularly sensitive to weather, like the storms in the Northeast–were down 15,000. A standout on the positive side was the manufacturing sector, where the three-month average job gain rose to 25,000.”

“As the labor market continues to tighten, and the pool of workers on the sidelines shrinks, monthly job gains are likely to slow somewhat. We expect payrolls to have increased 195,000 in April.”

“Average hourly earnings grew 0.3 percent in March and are up 2.7 percent on the year. The gradual rise in earnings over the past six months has been helping to support income growth and inflation but is also increasing pressure on profit margins. We expect another strong month for average hourly earnings in April.”