Synopsis:

Morgan Stanley expects the April US employment report to reflect ongoing labor market resilience, projecting a 160,000 increase in payrolls with steady wage growth and a flat unemployment rate.

Key Points:

• Payroll Growth: Nonfarm payrolls are forecast to rise by 160k, reflecting moderate but solid hiring, including a temporary 20k boost from the late-April Easter timing.

• Wage Inflation: Average hourly earnings are expected to increase 0.3% month-over-month, keeping the year-over-year rate at 3.9%, suggesting that labor demand remains firm.

• Unemployment Rate: The jobless rate is expected to hold at 4.2%, indicating no material deterioration in the labor market.

• Private Sector Hiring: A slight slowing in private payrolls is anticipated but not considered indicative of a turning point.

Conclusion:

Morgan Stanley sees the April jobs report as consistent with a healthy labor market, supporting the narrative of gradual cooling without collapse. The data is unlikely to compel immediate Fed action but may temper market bets on aggressive rate cuts.