US Week ahead: NFP, ISM and Core capex – Danske Bank

In the US, the jobs report is the most important release next week according to Danske Bank analysts. They think it is important to keep an eye on whether employment growth starts to decelerate.

Key Quotes: 

“In the US, the jobs report is the most important release which is due out Friday. We think average hourly earnings rose +0.25% m/m in March, which means an increase in the annual growth rate to 3.3% y/y, down from 3.4% y/y in February. We expect nonfarm payrolls rose 190k. In February, nonfarm payrolls only rose by 20,000, but this was likely a fluke, as nonfarm payrolls are very volatile. Overall, the labour market remains strong, but we think it is important to keep an eye on whether employment growth starts to decelerate.”

“Next week also brings ISM manufacturing, which is due out Monday. Based on a weighted average of the regional PMIs, we expect numbers to come in at 54.5 (currently 54.2). We still expect that manufacturing has peaked and we could see it move slightly lower over the next 3M before it stabilises (still above 50). The US manufacturing sector is not immune to what happens in the rest of the world. Retail sales control group data for February are also released on Monday, which we expect grew 0.5% m/m.”

“On Tuesday, core capex numbers for February are released, which have showed some weakness in recent months. Overall, we expect investments to continue growing in 2019 but at a slower pace compared to 2017 and 2018.”