BNP

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

BNP notes that the divergence in Non-Farm Payrolls (NFP) outcomes is the largest in over a year, excluding the October 2025 figures affected by the Department of Government Efficiency (DOGE) resignation wave. BNP suspects this is due to recent oscillatory patterns: some expect continued volatility, others expect the strong momentum from March to persist, while some — including BNP — have settled on a trend-like figure as the best estimate.

In any event, BNP believes the unemployment rate is a more Fed-relevant outcome, and leans towards seeing it tighten over time.

Alternative checks on the labor market this week provide no reason to adjust BNP's call, with jobless claims remaining low and job openings in line with expectations. ADP's lag relative to BNP's expectation (109k) represents only a nominal shortfall, as it remains solid against a backdrop of slowing to zero labor force growth.

An in-line outcome would certainly be consistent with BNP's call for policy rates to remain unchanged indefinitely, and BNP believes that a substantial miss would be required to begin changing our view on the likelihood of rate cuts.

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