- They see unemployment steady at 4.2%
Bank of America expects nonfarm payrolls to rise by 150K in May—above consensus—but warns of downside risks due to trade-related hiring volatility. The unemployment rate is forecast to remain at 4.2%, and a modest miss is unlikely to shift the Fed’s current policy stance.
Key Points:
- Headline Forecast: BofA projects a 150K increase in payrolls, compared to April’s 177K and a consensus of 120K.
- Sector Trends: Hiring in trade & transportation likely paused after previous front-loading due to tariff uncertainty.
- Downside Risks: Elevated uncertainty around tariff policy could weigh on job growth, though no broad layoffs are expected yet.
- Unemployment Rate: Expected to hold at 4.2%.
- Policy Implications: Even if the data disappoints modestly, the Fed is likely to remain on hold.
Conclusion:
BofA sees a stronger-than-consensus May payrolls print, but notes that tariff-related risks cloud the outlook. For now, labor market resilience supports a steady Fed, barring a more significant slowdown.
