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30 Jun 2015
US labour market preview: NFP expected at 225K – DB
FXStreet (Barcelona) - Economists at Deutsche Bank preview the US labour market data to be released on Thursday, expecting nonfarm payrolls to print a 225k figure and unemployment rate to edge down.
Key Quotes
“Regarding Thursday’s employment data—remember all financial markets are closed on Friday—nonfarm payrolls are projected at +225k compared to +280k previously. Meanwhile private payrolls are set to rise +210k versus +262k in May.”
“We are forecasting a slower pace of job creation because the four-week moving average of jobless claims was 10k higher during the June employment survey period than it was in the May survey period.”
“The unemployment rate could be as important to the financial markets as the pace of job growth, especially if we see more evidence that wage costs are accelerating. The unemployment rate (5.3% vs. 5.5%) is expected to edge down to its lowest level since April 2008 because of recent record-low readings on continuing claims.”
“Financial markets will be paying close attention to wage trends, especially if the unemployment rate falls as low as we expect. Average hourly earnings are expected to be up modestly (+0.2% vs. +0.3%), which would have the effect of keeping the year-over-year growth rate steady at 2.3%, the top end of its post-recession range.”
“Finally, look for the nonfarm workweek (34.6 hours vs. 34.5 hours) to rise slightly, which when combined with our estimate of June job gains, implies a 0.5% increase in the index of aggregate hours. Aggregate hours would be up 1.7% for the quarter, which would be consistent with 2.5% Q2 real GDP growth—this assumes productivity rebounds after unusual weakness in the previous two quarters.”
Key Quotes
“Regarding Thursday’s employment data—remember all financial markets are closed on Friday—nonfarm payrolls are projected at +225k compared to +280k previously. Meanwhile private payrolls are set to rise +210k versus +262k in May.”
“We are forecasting a slower pace of job creation because the four-week moving average of jobless claims was 10k higher during the June employment survey period than it was in the May survey period.”
“The unemployment rate could be as important to the financial markets as the pace of job growth, especially if we see more evidence that wage costs are accelerating. The unemployment rate (5.3% vs. 5.5%) is expected to edge down to its lowest level since April 2008 because of recent record-low readings on continuing claims.”
“Financial markets will be paying close attention to wage trends, especially if the unemployment rate falls as low as we expect. Average hourly earnings are expected to be up modestly (+0.2% vs. +0.3%), which would have the effect of keeping the year-over-year growth rate steady at 2.3%, the top end of its post-recession range.”
“Finally, look for the nonfarm workweek (34.6 hours vs. 34.5 hours) to rise slightly, which when combined with our estimate of June job gains, implies a 0.5% increase in the index of aggregate hours. Aggregate hours would be up 1.7% for the quarter, which would be consistent with 2.5% Q2 real GDP growth—this assumes productivity rebounds after unusual weakness in the previous two quarters.”