BNP

Nonfarm payrolls are less make-or-break than usual: BNP's expectations for April nonfarm payrolls (65k) and unemployment rate (steady at 4.3%) align with consensus, with a slightly stronger wage print.

BNP notes that the divergence in expectations for the nonfarm payrolls (NFP) outcome is the largest in over a year, if excluding the October 2025 numbers impacted by the Department of Government Efficiency (DOGE) resignations. BNP suspects this is due to recent oscillating patterns: some expect continued volatility, others expect the strong momentum from March to continue, while some – including BNP – settle on a trend-like number as the best estimate.

In any case, BNP believes the unemployment rate is the more Fed-relevant outcome, and tends to see it tightening over time.

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

An as-expected outcome would certainly be consistent with BNP's call for policy rates to remain on hold indefinitely, and BNP believes it would take a substantive miss to begin to change our view on the likelihood of rate cuts.

The same is true for 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 for an upward calibration of policy rates later this year, particularly if inflation remains elevated.