Some additional factors to watch in the nonfarm payrolls - Nomura

Analysts at Nomura, revised up our forecast for nonfarm payrolls to 175k from 160k and private payrolls to 170k from 155k after today's ADP report, noted some additional factors to watch in the nonfarm payrolls data tomorrow.

Key Quotes:

"Impact of recent strike activity: According to Bureau of Labor Statistics’ May strike report, there were 35.1k workers on strike during the employment survey reference pay period. (Note that the strike report only includes strikes of 1k workers or more.) 

However, this figure does not adjust for use of replacement workers, and news reports noted that some temporary workers were hired in anticipation of the strike. Our back-of-theenvelope calculation on the ADP employment figures suggests that about half of the striking workers were likely replaced. This should negatively affect the headline payroll figures, and we have adjusted our official forecast to take this into account. 

Labor force participation rate: After increasing for six consecutive months on an unrounded basis, the labor force participation rate declined in April to 62.8% from 63.0%. Our analysis suggests the labor force participation rate should remain stable around this range in 2016 before modestly trending higher in 2017."