Lowering Estimate of April Payrolls After ADP, But Q1 GDP Likely to be Revised Up

I'm lowering my estimate of April Payrolls to +150k m/m after the +156k ADP Estimate.

      a.  My earlier estimate was an already below-consensus +175k (consensus +200k).

The low ADP Estimate cannot be attributed to technical reasons but likely reflected a slowing in the ADP sample, itself.

I still think that April Payrolls will be held down by /1/ a lagged response to the Q116 GDP slowdown and /2/ the absence of unusual bounces in some components in March.

The weak productivity seen in Q415 and Q116 underscores that recent job growth has been too high relative to output growth.  

That said, it looks like Q116 GDP should be revised up to some extent from +0.5% (q/q, saar) as a  result of March Construction Spending (reported yesterday) and March Trade Deficit (reported today).

        a.  I have not had a chance to do the calculations, but an upward revision should not be enough to change the story of slow GDP growth continuing in Q116.