Release time: Thursday, July 3 at 8:30 am ETConsensus estimate +110K Estimate range +50K to +160KMay was +139KPrivate consensus +105K versus +140K priorUnemployment rate consensus estimate 4.3%Prior unrounded unemployment rate 4.244%Prior participation rate 62.4%Prior underemployment U6 7.8% Avg hourly earnings y/y exp +3.9% versus +3.9% priorAvg hourly earnings m/m exp +0.3% versus +0.3% priorAvg weekly hours exp 34.3 versus 34.3 prior
Numbers released so far this month:
ADP report -33K versus +95K prior (lowest since 2023)ISM services employment not yet releasedISM manufacturing employment 45.0 vs 46.8 prior — 3-month lowChallenger job cuts 48.0K vs 93.8K prior Philly employment -9.8 vs +16.5 prior (lowest since 2020)Empire employment +4.7 vs -5.1 prior Initial jobless claims survey week 246K vs 226K prior
We are getting a rare Thursday edition of non-farm payrolls as it’s rushed out ahead of the July 4 US holiday (and market closure). We didn’t get the ISM services number ahead of the release so that’s one less helpful reading ahead of the report. The worrisome one so far is ADP employment as it fell to the lowest since March 2023. What’s particularly concerning is that the drop in ADP is looking less like variance and more like a trend as it steadily deteriorates over a number of months.
In terms of seasonals, BMO reports that 42% of previous unemployment reads for June have been higher-than-expected, 27% have been lower-than-estimates, and 31% have matched the consensus while the headline is split 50/50 between upside and downside misses, though the downside misses tend to be slightly larger.
The market is already pricing in 30 bps of easing for the September report but just a 23% chance of a July move. I think it would take a negative number to really bump those July numbers up but even then, the Fed could see it as a one-off. In any case, the market is sniffing out some economic weakness in the US and that’s been a big drag on the US dollar lately.
This article was written by Adam Button at www.forexlive.com.