US: Data to continue to point to a strong economy - Nomura

Analysts at Nomura expect next week’s data to continue to point to a strong economic picture of United States.

Key Quotes

“For nonfarm payrolls (NFP), we look for a 115k gain on the heels of a weather-related 313k surge in February. Despite the low March forecast, we expect monthly NFP gains to average 220k in Q1 2018. While we also expect the unemployment rate to fall 0.1pp to 4.0% in March, there is a risk it could possibly slip further to 3.9%. Finally, we forecast a steady 0.2% m-o-m increase in average hourly earnings (AHE), reflecting our view that any pickup in AHE will be slow and gradual.”

“We also expect business optimism to remain elevated. For the March ISM surveys we forecast continued elevated readings, consistent with steady economic momentum to close out Q1. While incoming spending data have been somewhat weaker than expected, survey indicators have remained buoyant so far this year. The one relatively conservative forecast for next week, besides our below-consensus NFP expectation, is March vehicle sales. We expect sales to slow further to a pace of 16.8mn saar, below last month’s 17.0mn.”