Live Data Coverage: June US Nonfarm Payrolls w/ Christopher Vecchio, CFA
US NFP Preview:
- Consensus forecasts are looking for payrolls to come in at +700K, an improvement over last month’s disappointing +559K reading.
- Increasing vaccination rates, schools reopening in the fall, and the end of unemployment insurance benefits suggests the US labor market has tail winds behind it.
- Will a rebound in the US jobs report help the US Dollar continue its push towards multi-month highs? We’ll discuss these questions and more in context of the June 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.
Focus Returns to US Labor Market
The main issue when it comes to the June US NFP report is whether or not the US labor market regained its momentum after a stumbling in back-to-back reports in April and May. The April print came in at +266K against an expectation for +1000K (or +1M) jobs added, while the May reading registered +559K versus 650K expected.
The fits and starts of the US economy fully reopening don’t seem to be dissuading forecasters from projecting a rebound in US labor market prospects, as falling jobless claims and rising vaccination rates bode well for US labor market potential. The consensus calls for jobs growth of +700K, while the unemployment rate (U3) is anticipated to drop from 5.8% to 5.7%. Meanwhile, the US labor force participation rate is due in at a meager 61.7%.
Atlanta Fed Jobs Growth Calculator (June 2021) (Chart 1)
Even if there are good jobs data, there is still a long ways to go before the US reaches ‘full employment’ as experienced pre-pandemic, which According to the Atlanta Fed Jobs Growth Calculator, the US economy needs +740K 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.
The expected data aren’t numbers that would provoke the Fed to shift its current stance over the summer months; taper talk won’t begin in earnest until at least Jackson Hole in August or the September FOMC meeting.
We’ll discuss these questions and more in context of the June 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.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
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