Synopsis:

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.