The numbers to watch this week
Attention shifts to the labor market this week, with the U.S. releasing its employment report for June. The economy is expected to have added a robust 339,000 jobs in the month, according to a MarketWatch survey. Persistent buoyancy in the market and the upward pressure on wages it creates have played a key role in explanations by the Federal Reserve on why it has been raising interest rates at the fastest clip in decades. While the Fed’s favored price gauge last Friday showed inflation moderating in April, this Friday’s jobs report, along with other labor data, is likely to factor into the central bank’s next rate decision on July 26.
Tuesday, July 4: Holiday, all markets closed.
Thursday, July 6:
- The U.S. Department of Labor will release initial jobless claims for the previous week. The report, a proxy for layoffs, tracks the number of people filing for unemployment benefits.
- The Bureau of Labor Statistics will release the Job Openings and Labor Turnover survey for April, which measures job vacancies across industries.
Friday, July 7:
- The Bureau of Labor Statistics will release the May jobs report. The monthly release tracks the unemployment rate and how many jobs were added to the economy.
By Cate Chapman, Editor at LinkedIn News
The monthly employment report is expected to show some further slowing in the pace of hiring. A rough early consensus is for an increase of 200,000 in nonfarm payrolls in June when those numbers are released at 8:30 ET on Friday. This would put the average monthly pace at around 280,000 in the second quarter, a dip from the 317,000 average per month in the first quarter. It isn’t a material drop and is quite similar the to monthly average of 264,000 in the fourth quarter 2022. It’s a consequence of the deficit in the supply of labor that despite slower economic conditions and risks to the outlook that businesses are still hiring.
The June numbers could be influenced by two special factors. First, there is a five week stretch between the May and June reference periods that could mean that graduates not captured in the May survey will be in the June numbers. Second, the work stoppage by the Writers Guild of America affects 11,500 workers that will not count among the employed until the strike is settled, and could also idle other workers in the entertainment industry for the duration of the strike. #weekahead
High points for economic data scheduled for July 3 week
The July 3 week is shortened by what is effectively a holiday on Monday and the Independence Day observance on Tuesday. US stock and bond markets will both close early on Monday. Many businesses will have only a skeleton staff on Monday, or be shuttered. Travel and leisure services, and retailers are going to be open to take advantage of what is essentially a four-day weekend. While the normal data release schedule will be in place for Monday, the holiday on Tuesday will push back the timing of some releases.
The focus for the week’s economic reports will be the labor market. Thursday morning will have a crush to sort through before the Friday release of the June Employment Situation at 8:30 ET. These numbers will inform the outlook for the FOMC meeting on July 25-26. A little more cooling in the labor market will not be unwelcome as policymakers look for the supply workers to come back into better balance with demand.
On Thursday there is a quick succession of numbers in the Challenger layoff report for June at 7:30 ET, ADP National Employment Report for June at 8:15 ET, jobless claims for the week ending July 1 at 8:30 ET, and JOLTS at 10:00 ET. Collectively, these are expected to show that businesses are eliminating open jobs rather than laying off current workers. Where layoffs are happening is in a few narrow sectors like retail where chains are closing underperforming stores or going out of business entirely, or where hiring done during the pandemic is giving way to more normal conditions which is particularly acute in technical fields. Smaller businesses have been gasping for workers in a highly competitive environment but may finally be getting some relief in the escalation of compensation costs and/or the availability of workers with the right skillsets.