NFP growth expected to moderate in June

The official June employment report for the US will be made available next Friday. The expected rise in payrolls is 200K, according to the market. Analysts anticipate a gain of 245K. Investors’ attention will therefore turn to consumers in a week that includes a wealth of earnings and data relating to consumer spending, as well as the important US jobs report and FOMC minutes.

The primary risk event is NFP data. In addition, we have data on German industrial production amid a sprinkling of recent information that suggests Europe’s economic engine is losing steam.

The nonfarm payrolls increased by 339K in May’s employment report, which was a significant increase. The household survey, which showed a 310K decrease in household employment and an increase in the unemployment rate to 3.7%, added support to the idea that the labour market is still steadily softening.


Analysts anticipate that nonfarm payroll growth will slow down in June. Initial unemployment claims are rising between survey weeks and the four-week average is rising by about 20% over the previous year, indicating that the need for workers is continuing to decline. In the meantime, June saw a decline in job posts.


Jobs market cooling is still gradual rather than dramatic. Because of the 22-year low in the survey response rate, experts anticipate a still significant growth of 245K new jobs in June but will closely monitor revisions to May.


Analysts predict that the unemployment rate will gradually decrease to 3.6% as the household measure of employment begins to recover.