This week’s ForecastEx pick of the week is tomorrow’s headline nonfarm payrolls. Specifically, the case for a big beat has weakened recently following three consecutive days of lighter-than-expected labor data from the JOLTS, ADP and unemployment claims publications. Meanwhile, the median estimate in tomorrow’s nonfarm payroll report for April is for 130,000 additions while our prediction market’s midpoint is slightly higher at 138,000. Considering how the odds of a significant beat have declined during the last few days, the “No” answer corresponding with a number at 220,000 or below for a cost of $0.82 offers an attractive risk-return profile, in my opinion. Additionally, the 3- and 12-month job growth averages are much lower at 157,000 and 152,000.
Unemployment Expectations
Our prediction market’s expectation for the April unemployment rate, released in the same report as nonfarm payrolls, is for an unchanged 4.2%. Folks looking for a tick higher in joblessness can purchase the “Yes” at 4.2% for $0.46 while those looking for a steady level or a decline can opt for the “No” at 4.2% for $0.52. Finally, for traders looking for a significant move higher or lower, the “No” at 4.1% is priced at $0.26 while the “Yes” at 4.3% costs $0.19 at the moment. We also have many other thresholds, higher and lower, which you can examine below.
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Note: Prices are highest bids as of the morning of May 1, 2025.
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Disclosure: CFTC Regulation 1.71
This is commentary on economic, political and/or market conditions within the meaning of CFTC Regulation 1.71, and is not meant provide sufficient information upon which to base a decision to enter into a derivatives transaction.
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