Friday preview: Investors eye US non-farm payrolls, some analysts wary

The US non-farm payrolls report will dominate Friday’s agenda with analysts expecting a slowdown in the number of jobs added in April.

US employers are forecast to have added 200,000 jobs last month, compared to 215,000 in March. The unemployment rate is expected to remain at 5.0%

Average hourly earnings are projected to rise 2.4% in April following a 2.3% gain the prior month.

The data from the Labour Department will be closely scrutinised by Federal Reserve policymakers as they take into consideration the health of the jobs market in determining the timing of the next interest rate hike.

Last month, the Fed voted to keep interest rates unchanged but left the door open to a rate hike in June, saying: “Labour market conditions have improved further even as growth in economic activity appears to have slowed.”

The non-farm payrolls figures follow Wednesday’s private payrolls report from ADP which came in weaker than anticipated.

ADP said US employers added 156,000 jobs in April, compared with a downwardly-revised 194,000 in March and analysts’ estimates of 196,000.

The construction industry added 14,000 jobs, down from March’s 18,000, while manufacturing lost 13,000 jobs after being revised down to a 3,000 drop the previous month.

Mark Zandi, chief economist of Moody’s Analytics, said: “The job market appears to have stumbled in April. Job growth noticeably slowed, with some weakness across most sectors. One month does not make a trend, but this bears close watching as the financial market turmoil earlier in the year may have done some damage to business hiring.”

Meanwhile, the weekly jobless claims report on Thursday revealed a bigger-than-expected increase. Initial jobless claims climbed to 274,000 in the week to 30 April from 257,000 the previous week, worse than forecasts of 260,000.

Everyone of the last 11 recessions in the US had been preceded by a drop in US corporate profits per worker, with that ratio now down by 15% from the most recent peak reached in the second half of 2014, Jim Reid at Deustche Bank pointed out in a research note sent to clients.

"Initial jobless claims are still very strong so we'd stress that there is no current evidence of such a trend. However given the usual lags, there is still plenty of time for employment patterns to change and the economy to move into recession if history is our guide," Reid added.

Friday 06 May

INTERIMS
Numis Corporation

INTERIM DIVIDEND PAYMENT DATE
Animalcare Group, Begbies Traynor Group, St Ives

QUARTERLY PAYMENT DATE
British Land Company, Investors Capital Trust 'A' Shares

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Credit (US) (20:00)
Non-Farm Payrolls (US) (13:30)
Unemployment Rate (US) (13:30)

IMSS
InterContinental Hotels Group

AGMS
BrainJuicer Group, Capital & Counties Properties , Clarke (T.), InterContinental Hotels Group, Man Group, Morgan Advanced Materials , RSA Insurance Group, Starwood European Real Estate Finance Ltd, Zhejiang Expressway Co 'H' Shares

TRADING ANNOUNCEMENTS
Capital & Counties Properties , InterContinental Hotels Group, International Consolidated Airlines Group SA (CDI)

FINAL DIVIDEND PAYMENT DATE
Berendsen, BlackRock World Mining Trust, Capital Drilling Ltd. (DI), Charles Taylor, CRH, Entu (UK) , Fevertree Drinks, Fisher (James) & Sons, Fyffes, LSL Property Services, Maven Income & Growth 4 VCT, Meggitt, Mithras Inv Trust, Moneysupermarket.com Group, Pearson, Rexam, Secure Trust Bank, Spirent Communications, Stadium Group, Synectics