US Macro Weekly--Jobs report in the spotlight
Week ahead A busy week will be highlighted by the June employment report, releasedfollowing a mid-week break for the July 4th holiday. Also on deck areboth ISMs, JOLTS job openings, and the minutes from the June FOMC,
应用介绍
Week ahead
A busy week will be highlighted by the June employment report, released
following a mid-week break for the July 4th holiday. Also on deck are
both ISMs, JOLTS job openings, and the minutes from the June FOMC,
along with a handful of Fed speakers including an appearance by Chair
Jerome Powell at Sintra.
The labour market has remained resilient at first glance, but we see some
signs of cooling under the surface, and expect the June jobs report to
align with this picture. Here, we look for headline NFP gains to slow but
remain solid, at 200k vs 272k last month, with average hourly earnings
rising 0.3% MoM to result in the YoY pace slowing to 3.9% from 4.1%.
That said, employment in the household survey has been much weaker,
which has seen the unemployment rate rise 0.6ppt from the cycle low to
hit 4.0%, a level we expect will be maintained in June.
With JOLTS and the quits rate also declining towards pre-Covid levels,
we think this suggests that NFP alone exaggerate the strength of the
labour market, which has begun to cool. To be clear, the labour market
has by no means fallen off a cliff, and the cooling we have seen thus far
is not enough to prompt the Fed into immediate action. However, further
cooling in upcoming months could help make the case for rate cuts later
in the year given our view that the Fed’s reaction function will be
asymmetric with regards to the employment side of the mandate.
Elsewhere, data has been mixed, though overall suggests that signs of
slowing momentum have begun to emerge. This trend will likely be
evident in non-employment data next week as well, including the June
ISMs. Here, we expect manufacturing to hold at 49.7, remaining in
contraction, and services to comes in at 52.0. This would still be in
expansion, but would reverse much of an unexpected increase in May.
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