US: Nonfarm payroll growth to moderate in June – Wells Fargo
|Next Friday, the US will release the June official employment report. The market consensus is for an increase of 200K in payrolls. Analysts at Wells Fargo forecast a 245K gain.
Key quotes:
“May's employment report delivered a strong rise in nonfarm payrolls with a 339K gain. However, the household survey added weight to the view that the labor market continues to gradually soften, with household employment contracting by 310K and the unemployment rate ticking up to 3.7%.”
“We expect nonfarm payroll growth to moderate in June. Demand for workers continues to subside, with initial jobless claims moving up between survey weeks and the four-week average up nearly 20% over the past year. Meanwhile, job postings in June continued to slide.”
“Cooling in the jobs market remains incremental rather than abrupt. Therefore, we look for what we would consider to be a still robust gain of 245K new jobs in June, but will be closely watching revisions to May given the 22-year low in the survey response rate.”
“We look for the unemployment rate to tick back down to 3.6% in anticipation of some bounce-back in the household measure of employment.”
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