BNP

Non-farm payrolls are less make-or-break than usual: BNP's expectations for April non-farm payrolls (65k) and the unemployment rate (stable at 4.3%) are in line with consensus, and slightly strong on wages.

BNP notes that the dispersion of non-farm payroll (NFP) results is the largest in over a year, excluding the October 2025 figures affected by the Department of Government Efficiency (DOGE) resignations. BNP suspects this is due to recent choppy patterns: some expect continued choppiness, others expect March's strength to persist, and some—including BNP—are anchored to a trend-like number as a best guess.

In any event, BNP sees the unemployment rate as the more Fed-relevant outcome, and would tend to see it tightening over time.

This week's alternative checks on the labor market give no reason to adjust BNP's call, with initial jobless claims holding low and job openings in line with expectations. The ADP's undershoot relative to BNP's expectation (109k) represents only a nominal miss, as this remains solid against a backdrop of slowing to zero labor force growth.

An in-line print would of course be consistent with BNP's call for policy rates to remain on hold indefinitely, and BNP believes it would take a substantial undershoot to begin changing our views on the likelihood of rate cuts.

The same holds for upside surprises. However, it would not take more than a couple of months of strong job growth to likely push the unemployment rate below 4% in the coming months. We suspect this is a threshold that might begin to open the door to an upward calibration of policy rates later this year, particularly with inflation remaining elevated.