Abstract：Consensus forecasts are looking for jobs growth of +250K while the unemployment rate (U3) is anticipated to hold at 3.6%.
US NFP Preview:
Will the July US jobs report change the Federal Reserve‘s rate hike path？ We’ll discuss these questions and more in context of the July US nonfarm payrolls report starting at 8:15 EDT/12:15 GMT. You can join live by watching the stream at the top of this note.
Good News is Bad News？ Or…
A US recession may or may not be upon us, but the US labor market has remained resilient thus far. According to a Bloomberg News survey, the US economy added +250K jobs in July from +372K jobs in June, with the US unemployment rate (U3) holding at 3.6%. The US participation rate is expected to edge higher to 62.3% from 62.2%, while US average hourly earnings are anticipated to come in at +4.9% y/y from +5.1% y/y.
If ‘good news is bad news’ for risk assets as the Federal Reserve recalibrates its policy stance, then ‘good news is good news and bad news is bad news’ for the US Dollar: a strong US labor market report could help revitalize Fed rate hike odds; a weak US labor market report could drag forward rate cut odds in 2023, which would hurt the US Dollar.
Atlanta Fed Jobs Growth Calculator (July 2022) (Chart 1)
The US economy continues to make steady progress towards ‘full employment’ as experienced pre-pandemic. According to the Atlanta Fed Jobs Growth Calculator, the US economy needs +334K jobs growth per month over the next 12-months in order to return to the pre-pandemic US labor market of a 3.5% unemployment rate (U3) with a 63.4% labor force participation rate.
Well discuss these questions and more in context of the July US nonfarm payrolls report starting at 8:15 EDT/13:15 GMT. You can join live by watching the stream at the top of this note.
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