The upcoming Labor Department report is expected to show an increase of 204,000 in US private nonfarm payrolls for April, according to The Capital Spectator’s average point forecast derived from various econometric models. This figure indicates a slight improvement over last month’s growth.
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Recent updates on layoffs in April indicate a potential slowdown in the growth of the US labor market. The extent to which this deceleration may continue or reverse remains uncertain. Until forthcoming reports provide clearer insights, it’s reasonable to assume that modest growth continues to be the most likely scenario. This morning’s figures come after yesterday’s unexpectedly low report on US private-sector payrolls from ADP’s estimate. Thankfully, positive survey results from the US services sector for April offer some balance to the negative news. However, the current employment data is not moving in a favorable direction. Will tomorrow’s official job report for April provide a different perspective? Consensus forecasts from Econoday.com suggest it might. In the meantime, let’s examine the latest statistics on jobless claims and layoffs.
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Yesterday’s disappointing data on job growth for April from the ADP Employment Report raises doubts about the prospects for a rebound in US economic activity during the second quarter. However, if you’re seeking reasons for optimism, the survey data released Wednesday regarding the services sector may offer some hope.
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● ADP reports slowdown in US private-sector job gains for April | MarketWatch
● US ISM Non-Manufacturing Index rises to a four-month high in April | Bloomberg
● PMI: US service sector growth reaches a three-month high in April | Markit
● US factory orders show moderate increase in March | AP
● US productivity declines for the second consecutive quarter in Q1 | Bloomberg
● Mortgage applications in the US decrease by 3.4% last week | CNBC
● Survey indicates US Job Creation Index remains steady in April, close to record highs | Gallup
● China Services PMI growth slows to a near halt in April | Markit
● Global air passenger traffic experiences slowdown in March | IATA

According to the latest ADP update, employment growth in the US slowed in April, marking the weakest gain in three years. The private sector added only 156,000 jobs last month on a seasonally adjusted basis, falling short of expectations for a gain nearing 200,000. This data raises further questions regarding the anticipated rebound in economic activity for the second quarter, following the weak Q1 GDP report. Additionally, this report brings renewed focus to a question posed last week: Will job growth negate the bear-market signal for stocks?
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In a compelling speech at last month’s Q Group Spring Seminar, Vanguard founder John Bogle reiterated his case for favoring basic indexing and avoiding complexity in portfolio design and management. Morningstar’s John Rekenthaler notes that Bogle effectively employs “basic math” to challenge the expectations of investment managers who might resort to overly complicated strategies in pursuit of outperforming benchmarks. For those familiar with Bogle’s longstanding principle of simplicity and preference for straightforward index funds, this latest address continues to resonate. Despite his criticism of more complex strategies, Bogle’s insights remain invaluable for investors. Below, we share a few key excerpts from his recent discourse titled “David and Goliath: Who Wins The Quantitative Battle?”
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● US auto sales show recovery in April | MarketWatch
● Redbook reports a slight decline in US retail sales growth during the last week of April | TradingEco
● European Commission revises down its growth forecast | IBT
● Revised PMI Composite indicates slow growth in the Eurozone for April | Markit
● Global manufacturing continues to grow slowly during April | Markit
● Atlanta Fed President expresses optimism based on employment data | MNI
● Trump becomes the presumptive Republican nominee as Cruz exits the race | Bloomberg
● Impact of slow growth on a potential Clinton presidency | Fiscal Times

For April, private nonfarm payrolls in the US are anticipated to rise by 196,000 (seasonally adjusted), according to The Capital Spectator’s average point forecast based on various econometric estimates. This forecast signifies a minor decrease from the previous month’s robust growth.
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Correction: An updated data table is provided below to correct an earlier mislabeling of asset classes. The data itself remains accurate. We apologize for any confusion. –JP

The expected risk premium for the Global Market Index (GMI) has risen for the second consecutive month in April, reaching its highest level since last November. GMI—a market-value-weighted mix of major asset classes—is projected to yield an annualized 3.3% over the “risk-free” rate in the long term, which is moderately above last month’s estimate. For further details on the equilibrium-based methodology used to generate these monthly forecasts, please refer to the summary below.
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● US ISM Manufacturing Index remains positive, but barely in April | Reuters
● PMI: US manufacturing output is close to stagnation in April | Markit
● US construction spending increased by 0.3% in March—the highest level in over eight years | AP
● Consumer spending in the US rises in April, according to surveys | Gallup
● GDPNow forecast suggests Q2 GDP growth of +1.8% | Atlanta Fed
● China’s Caixin manufacturing PMI continues to decline in April | MarketWatch
● Reserve Bank of Australia reduces cash rate to combat deflation | Financial Review