A preview of the nonfarm payroll report due form the US on Friday 3 August
- expected 192K
- prior 213K
Previews to kick off:
Barclays:
July employment report, we look for nonfarm payrolls to rise 175k and private payrolls to increase 160k
- This would represent some modest slowing from the recent trend pace of hiring and, in our view, could reflect increasing concerns over protectionism
- We expect the unemployment rate to decline 0.1pp, to 3.9%, and average hourly earnings to increase 0.3% m/m and 2.7% y/y
- Finally, we forecast an unchanged work week at 34.5 hours.
Nomura
We expect a gain of 195k in July nonfarm payroll employment, tightening the labor market further, with a 190k contribution from private employers and a 5k gain from government. For manufacturers, we expect a 15k gain considering still elevated manufacturer sentiment.
- However, strong increases in hiring by autos manufacturers in June were likely due to a transitory ramp up in production during the month following disruptions in May, and could revert in July.
Payroll growth has accelerated over the past two months with gains of 244k and 213k in May and June, respectively. Consistent with solid economic momentum in Q3 and solid readings on initial jobless claims and business surveys, we think payroll growth is likely to remain strong.
We forecast a 0.22% m-o-m increase in average hourly earnings (AHE), corresponding to 2.65% y-o-y, with no calendar bias this month.
- We continue to expect wage growth to climb higher only gradually.
For the unemployment rate, we expect a 0.1pp decline to 3.9% after a surprise 0.2pp increase last month driven by an influx of workers into the labor market and weaker employment growth relative to its payroll counterpart.